/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090825.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 25, 2009, Vol. 13, No. 235 Headlines 531 BERGEN LLC: Voluntary Chapter 11 Case Summary ABITIBIBOWATER INC: Sells Ownership Stake in Quebec Inc. ACCREDITED HOME: Committee Tosses Out Objection to $22 Mil. Deal ADIR M CORP: Construction Delays, Recession Cue Chapter 11 Filing AINSWORTH LUMBER: S&P Affirms 'B-' Corporate Credit Rating ALL PHASE: Performance & Payment Bonds Not Executory Contracts AMERICAN AXLE: Fitch Affirms Junk Issuer Default Rating AMERICAN CAPITAL: S&P Cuts Counterparty Credit Rating to 'B-' ARVINMERITOR: Fitch Keeps Junk Issuer Default Rating ASARCO LLC: East Helena Smoke Stacks Demolished ASARCO LLC: Parent Appeals SCC Bidders' Expense Reimbursements ASARCO LLC: Wants Plan Related Documents From Parent ASSOCIATED CONTRACTING: Case Summary & 20 Largest Unsec. Creditors ATLANTIC CITY HILTON: Defaults on Monthly Interest Payment of Loan ATTORNEYS TITLE INSURANCE: AM Best Downgrades Credit Rating to C- AVISTAR COMMUNICATIONS: Nasdaq to Delist Shares Effective Aug. 31 BEAZER HOMES: Moody's Assigns Default Rating at 'Caa2/LD' BEREAN CHRISTIAN: Sold to 2 Investors, Operations Continue BERNARD MADOFF: Prosecutors Want DiPascali's Assets Seized BERNARD MADOFF: Not Terminally Ill, Says Bureau of Prisons BIOPURE CORPORATION: OPK to Purchase All Assets for $4 Million BRADKEN INC: Moody's Downgrades Corporate Family Rating to 'B3' CALYPTE BIOMEDICAL: Delays Filing of June 30 Quarterly Report CARROLL COUNTY: S&P Downgrades Rating on $20 Mil. Bonds to 'BB-' CHAMPION ENTERPRISES: S&P Cuts Corporate Credit Rating to 'CC' CHARTER COMMUNICATIONS: Plan May Have Reached Impasse CHINA HEALTH: June 30 Balance Sheet Upside-Down by $6 Million CLARE HOUSE: Voluntary Chapter 11 Case Summary COLLINS & AIKMAN: Moody's Affirms 'B2' Corporate Family Rating COLONIAL BANCGROUP: Bank Receivership Cues Default on Securities COLONIAL BANCGROUP: Colonial Bank Failure Hits Client Taylor Bean COLONIAL BANCGROUP: DBRS Downgrades All Ratings to D COLONIAL BANK: S&P Withdraws 'CCC-' Rating on Various Bonds CRUCIBLE MATERIALS: Wants to Sell All Assets; 2 Units Have Buyer CRUCIBLE MATERIALS: Plan Exclusivity Extended Until Dec. 2 CRUSADER ENERGY: Wants Plan Filing Deadline Extended CT INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors CUNNINGHAM BROADCASTING: Payment of $33.5MM Loan Moved to Oct. 30 DAYTON SUPERIOR: To Send Plan Ballots in September DEIDRA NEWTON: Case Summary & 20 Largest Unsecured Creditors DEVELOPERS DIVERSIFIED: S&P Cuts Rating on Unsecured Debt to 'BB' DOLLAR GENERAL: Moody's Hikes Outlook on 'B2' Rating to Positive DOLLAR GENERAL: S&P Puts 'B+' Rating on CreditWatch Positive DOUBLE EXPOSURE: Recession Led to Chapter 11 Bankruptcy DOW INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors DRAIN DOCTORS: Voluntary Chapter 11 Case Summary DYNAMOTIVE ENERGY: Posts $3MM Net Loss in Six Months Ended June 30 ELEMENT ALUMINUM: Auctions Substantially All Assets Today ENCORIUM GROUP: Posts $2MM Q2 Loss, May Dissolve by Q1 2010 ESCADA AG: U.S. Unit to Honor Customer Programs ESCADA AG: U.S. Unit to Pay Debt to Common Carriers ESCADA AG: U.S. Unit to Pay Prepetition Employee Wages ESCADA AG: Various Parties Interested in Assets, Brand Name ESSAR STEEL: Moody's Reviews 'Caa1' Corporate Family Rating FIRST UNITED: Doesn't Expect Chapter 11 as Margins Improve GANNETT CO: Moody's Confirms Corporate Family Rating at 'Ba1' GENERAL MOTORS: Board Postpones Opel Sale Decision GENERAL MOTORS: KDB Won't Provide Daewoo Aid Absent Long-Term Plan GENERAL MOTORS: New GM Hikes Production in U.S. & Canada GENERAL MOTORS: Toyota to Terminate Nummi Venture in March 2010 GENERAL MOTORS: Close to Signing Deal to Sell Hummer to Chinese GRANT AFRICAN: Case Summary & 20 Largest Unsecured Creditors GUARANTY FINANCIAL: To File for Chapter 11 as Bank Seized HARRIS INTERACTIVE: Bell Won't Stand for Re-Election as Chairman HARRIS INTERACTIVE: Board Approves Targets Under 2010 Bonus Plan HARRIS INTERACTIVE: Posts $700,000 Net Loss for Qrtr Ended June 30 HARRY MARSHAK: Case Summary & 12 Largest Unsecured Creditors HAWAIIAN TELCOM: ACE Group Wants Leave to File Late Claim IMAX CORP: Inks Underwriting Deal With Roth Capital on Shares Sale IMPERIAL INDUSTRIES: Posts $2.43MM Net Loss for 1H of 2009 JEFFERSON COUNTY: Moody's Affirms 'Caa1' Rating on $270 Mil. Debt LEHMAN BROTHERS: Deal Ending Fidelity Open Trade Confirmation LEHMAN BROTHERS: Objections to LBI Trustee's Denial of Claims LEHMAN BROTHERS: Rentenbank to Probe LBSF & LBHI Consolidation LEHMAN BROTHERS: WaMu Wants Lift Stay to Keep Foreclosure Action LEHMAN BROTHERS: Prudential Sues LBSF to Set Off vs. Collateral LYONDELL CHEMICAL: Parent Expects to Continue to Lag Plan in Q3 LYONDELL CHEMICAL: To Restart Channelview PO/SM Unit in September MANAGED HEALTH: Moody's Gives Positive Outlook, Keeps 'B3' Rating MARC DREIER: List of Fraud Victims Released MARKUS KLINKO: Files for Chapter 11 Bankruptcy Protection MAYAPPLE LLC: Case Summary & 4 Largest Unsecured Creditors MERRILL CORPORATION: Moody's Cuts Corporate Family Rating to 'B3' MERRILL LYNCH: BofA Denies Pre-Merger Deception in Bonuses MILACRON INC: Investor Group Completes Purchase of Business NATIONAL GOLD: Owner Opens Another Coin Dealing Firm MICHAEL MCCULLOUGH: Case Summary & 15 Largest Unsecured Creditors OCALA FUNDING: Moody's Junks Ratings on Subordinated Notes OLD TIME POTTERY: Fails to Extend Credit Pacts, Files for Ch 11 OLD TIME POTTERY: Case Summary & 20 Largest Unsecured Creditors OPUS SOUTH: Wants Time to Remove Actions Until Nov. 18 OPUS SOUTH: Obtains Nod to Auction Calm Waters Property OPUS WEST: Contracts to be Assigned at August 27 Auction OVERLAND DIRECT: Case Summary & 6 Largest Unsecured Creditors PACIFIC ENERGY: Wants Court to Approve Supplemental Incentive Plan PALMETTO GREENS: Seeks to Block Carolina Shores Foreclosure Sale PATHEON INC: Lonza Group Deal Won't Affect Moody's 'B2' Rating PEOPLES COMMUNITY: Nasdaq to Delist Shares Effective August 31 PHILADELPHIA NEWSPAPERS: Chief Says Publications Are Viable RACKSPACE HOSTING: Two Executives to Liquidate Portion of Holdings RADIOSHACK CORPORATION: Share Repurchase Won't Move Moody's Rating RAINBOWS UNITED: Sacks President & CEO Lorraine Dold READER'S DIGEST: Files Chapter 11 Petition to Implement Plan READER'S DIGEST: Case Summary & 30 Largest Unsecured Creditors REDDY ICE: Officers Set, Amend Stock Trading Plans With Brokers RICHARD LACK: Case Summary & 9 Largest Unsecured Creditors S & D INC: Case Summary & 10 Largest Unsecured Creditors SAXBYS COFFEE: Asks More Time for Schedules & Creditors List SEMGROUP LP: Judge OKs Sale of Assets to Seaco and 71 SENTINEL MGMT: Trustee May Not Sue on Claim Assigned by Creditors SILICON GRAPHICS: Could Liquidate Assets if Plan is Not Confirmed SIMON WORLDWIDE: Posts $466,000 Net Loss for June 30 Quarter SIX FLAGS: Files Revised Plan With Stock for Lenders SIX FLAGS: Committee Opposes $7.5MM Houlihan Transaction Fee SIX FLAGS: Operations Inc.'s Schedules of Assets & Debts SIX FLAGS: Operations Inc.'s Statement of Financial Affairs SIX FLAGS: Theme Park Unit's Schedules of Assets And Debts SIX FLAGS: Theme Park Unit's Statement of Financial Affairs SPANSION INC: To Sell Suzhou Facility to Powertech Technology SPANSION INC: Applies to Hire Ryan as Texas Consultant SPANSION INC: Asks for Court Nod to Reject Cadence Contract STANFORD GROUP: Vantis Gets Funds for SIB Antiguan Liquidation STANFORD GROUP: Receiver Faces Criticism & Possible Removal STAR GAS: Moody's Upgrades Corporate Family Rating to 'B2' STATION CASINOS: Founder Frank Fertitta Jr. Dies at Age 70 STILLWATER MINING: S&P Affirms 'B-' Corporate Credit Rating STINSON PETROLEUM: Court Moves Statement Filing Until September 9 STINSON PETROLEUM: Files List of 20 Largest Unsecured Creditors STINSON PETROLEUM: Section 341(a) Meeting Scheduled for October 2 STINSON PETROLEUM: Taps Harris Jernigan as Bankruptcy Counsel SUN-TIMES MEDIA: Uses Up Another $3.8MM in Cash in July 2009 SUNRA COFFEE: Case Summary & 22 Largest Unsecured Creditors T MUTHU KUMAR: Section 341(a) Meeting Scheduled for September 16 TAYLOR BEAN: Files for Chapter 11; Neil Luria Named CRO TAYLOR BEAN: Case Summary & 20 Largest Unsecured Creditors TAYLOR CAPITAL: Fitch Downgrades Issuer Default Rating to 'B-' TENNECO INC: Fitch Affirms 'B-' Issuer Default Rating THELEN LLP: Settles Schiff Hardin Contract Suit for $1.12-Mil. THOMAS ACI: Case Summary & 20 Largest Unsecured Creditors TIPJOY INC: Won't Pursue Funding, Shuts Down Operations TISHMAN SPEYER: S&P Downgrades Corporate Credit Rating to 'D' TRIBUNE CO: Sale to Rickets to Net $740MM Cash + 5% Stake in Cubs TRONOX INC: Stipulation Resolving Dunn-Edwards Pact Dispute TRW AUTOMOTIVE: Fitch Affirms 'B-' Issuer Default Rating VALCOM INC: Posts $584,783 Net Loss in Nine Months Ended June 30 VELOCITY EXPRESS: Management Group Scraps Recapitalization Deal X-RITE INC: Has Deal to Reduce 2nd Lien Debt by $41.6 Million VIEW SYSTEMS: Balance Sheet Upside-Down by $225,969 as of June 30 WASHINGTON MUTUAL: Noteholders Group May Be Forced to Reveal Names WINDSOR CENTURY: Meeting of Creditors Scheduled for September 8 WILLIAM BLINCOE: Meeting of Creditors Scheduled for September 1 * Kathryn Coleman Joins Hughes Hubbard as Partner * Rochdale Analyst Forecasts 150 to 200 More U.S. Bank Failures * Large Companies With Insolvent Balance Sheets ********* 531 BERGEN LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 531 Bergen LLC POB 380135 Brooklyn, NY 11238 Bankruptcy Case No.: 09-47172 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: Bruce Weiner, Esq. Rosenberg Musso & Weiner LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 Email: rmwlaw@att.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Jeremiah O'Brien, sole member of the Company. ABITIBIBOWATER INC: Sells Ownership Stake in Quebec Inc. -------------------------------------------------------- AbitibiBowater Inc. and its affiliates notified the U.S. Bankruptcy Court and parties-in-interest that they are selling Bowater Canadian Forest Products, Inc.'s 50% ownership stake in 90324286 Quebec Inc., or the Girardville Nursery for C$750,000. The Purchase Price is equivalent to approximately US$680,827, based on the closing mid-point rate as of July 21, 2009 as reflected in The Financial Times. Under an offer of acquisition, the purchaser is contemplated to either be: -- the "Cooperative de travailleurs actionnaire de serres et pepinieres Girardville," a cooperative of certain of the employees of Girardville Nursery; or -- 90324286 Quebec Inc. itself, through which the Debtors owned 50% ownership stake. Neither of the Potential Purchasers is affiliated with the Debtors. Absent the resolution of objections to the Notice, if any, the Miscellaneous Assets will only be sold, transferred or abandoned upon the Court's order. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of September 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes Abitibibowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ACCREDITED HOME: Committee Tosses Out Objection to $22 Mil. Deal ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Accredited Home Lenders Holding Co.'s cases has withdrawn its objection to the company's $22 million settlement in a securities class action, according to Law360. The Committee did not give a reason for the withdrawal of their objection to the settlement, the report says. In March 2007, AHLHC was served with a class action, "Atlas v. Accredited Home Lenders Holding Co., et al.," brought with the U.S. District Court for the Southern District of California. The complaint alleges violations of federal securities laws by AHLHC and certain members of senior management. About Accredited Home Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ADIR M CORP: Construction Delays, Recession Cue Chapter 11 Filing ----------------------------------------------------------------- Miro Cafe, under corporate entity Adir M. Corp., has filed for Chapter 11 bankruptcy protection, listing $50,000 to $100,000 in assets, and $500,000 to $1 million in liabilities owed to more than a dozen creditors. According to Adrianne Pasquarelli at Crain's New York, Miro Cafe's creditors include Bartlett Dairy & Food Service and cupcake shop Crumbs. Court documents say that Bartlett Dairy is still supplying the Miro Cafe with dairy products, as it has been for over nine years, and is currently owed $9,000. Crain's relates that Miro Cafe also owes Iron King Construction Inc. $280,000. Crain's states that construction delays coupled with the recession blocked the Miro Cafe owner Meir Maslavi's plans for the eatery. Miro Cafe is a popular eatery in SoHo, in New York City. AINSWORTH LUMBER: S&P Affirms 'B-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its ratings, including the 'B-' long-term corporate credit rating, on Ainsworth Lumber Co. Ltd. The outlook is negative. At the same time, S&P revised the recovery rating on Ainsworth's 'B-' rated unsecured debt to '4' from '3'. A '4' recovery rating represents an average (30%-50%) recovery in a default scenario. S&P lowered the recovery rating on the unsecured debt to reflect a higher unsecured debt amount outstanding at default than S&P previously assumed due to the payment-in-kind feature on this debt. The recovery rating on the 'B+' rated senior secured notes is unchanged at '1', indicating an expectation of very high (90%- 100%) recovery in the event of default. "The ratings on Ainsworth reflect S&P's view of the company's exposure to the volatile oriented strandboard market, expectations of weak profitability until 2011, and a highly leveraged capital structure," said Standard & Poor's credit analyst Jatinder Mall. "We believe these risks are partially mitigated by the company's low cost position stemming from strong Canadian assets and what S&P consider adequate liquidity to weather weak industry conditions in the next two years," Mr. Mall added. Ainsworth is a leading oriented strandboard producer in North America with operations in Canada and the U.S. With the closure and curtailments of capacity, the company's total annual capacity is about 1.6 billion square feet of OSB. The company's cost profile has improved with the permanent closure of its three OSB mills in Minnesota and indefinite closure of its High Level, Alta., OSB mill. This means that once demand and prices do rebound, Ainsworth's profitability will likely improve. All of the company's Canadian mills have long-term supply agreements to meet most of their fiber requirements. The negative outlook on the company reflects Standard & Poor's expectations that profitability will remain weak in the near term given market conditions for OSB producers, with no marked improvement in credit metrics until 2011. S&P could lower the ratings on Ainsworth if a combination of lower OSB prices and higher costs lead to a cash burn rate that is greater than anticipated, and liquidity dips below C$100 million in the next 12 months. On the other hand, an upgrade is unlikely given industry conditions but would require improvement in the company's profitability, with a funds-from-operations-to-debt ratio of about 12%-15% and leverage of below 5.5x. ALL PHASE: Performance & Payment Bonds Not Executory Contracts -------------------------------------------------------------- WestLaw reports that performance and payment bonds issued by a surety company on the Chapter 11 debtor's behalf in connection with an electrical contract between the debtor and a municipality were not "executory contracts" and, thus, the company failed to show "cause" for stay relief to terminate them. Both the debtor and the company performed the obligations required of them as of the operative dates, the bankruptcy court found. The company had issued the bonds as required and the debtor had paid the requisite bonds premium. The debtor did not have an obligation to complete the electrical contract, as work on the project had been suspended by the municipality. The remaining obligations which the debtor purportedly had underperformed were mere contingencies that might never materialize. In re All Phase Electrical Contracting, Inc., --- B.R. ----, 2009 WL 2382546 (Bankr. D. Conn.) (Shiff, J.). All Phase Electrical Contracting, Inc. -- http://www.allphaseeci.com/-- sought chapter 11 protection (Bankr. D. Conn. Case No. 08-50494) on June 6, 2008. Mario DeMarco, Esq., in Port Chester, N.Y., represents the Debtor. In its Schedules of Assets and Liabilities -- see http://bankrupt.com/misc/Connb08-50494.pdf-- All Phase disclosed $175,280 in assets and $9,954,224 in liabilities. AMERICAN AXLE: Fitch Affirms Junk Issuer Default Rating ------------------------------------------------------- Fitch Ratings has taken these ratings actions on certain U.S. auto suppliers: American Axle -- Issuer Default Rating is affirmed at 'CCC', removed from Rating Watch Negative and assigned a Stable Outlook; ArvinMeritor -- IDR 'CCC' remains on Rating Watch Negative; Tenneco -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook; TRW Automotive -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook. The rating action concludes the Rating Watch that was initiated on Dec. 11, 2008, due to concerns about possible bankruptcies by General Motors and Chrysler LLC; following the bankruptcies by the two automakers, the Rating Watch remained in effect due to concerns about post-bankruptcy vehicle volumes at GM and Chrysler. ArvinMeritor remains on Rating Watch Negative for separate matters. Both GM and Chrysler emerged from Chapter 11 and the extended production shutdowns are complete. Furthermore, the auto supply base has not faced serious disruptions despite some bankruptcies such as Hayes-Lemmerz International, Lear Corporation, Metaldyne Corp. and Visteon Corp. While the Rating Watch has been removed, Fitch views the global automotive environment as challenging in the near term and on a longer term basis, the suppliers should benefit from the significant restructuring actions taken before and during the global automotive slump. Fitch continues to believe that North American vehicle sales volumes will improve in the second half of 2009 versus the first half of the year. Drivers for the modest improvements against the first half are the government's 'Cash for Clunkers' program which is nearly completed; aggressive vehicle pricing; consumers' access to vehicle financing which was difficult to obtain in the early part of 2009; and a reduction in dealer inventories. With higher production volumes, auto suppliers will be using cash for working capital needs in the second half of the year, and Fitch expects most suppliers should have adequate liquidity while production ramps up. Fitch believes this to be the case given that many suppliers have amended financial covenants to ensure access to revolving credit facilities. American Axle is currently trying to obtain covenant relief as well as other modifications to its credit agreement to ensure its access to liquidity as discussed below. Looking ahead to 2010, Fitch continues to see gains in vehicle sales in North America which should enable the suppliers to gain operating efficiencies; in Europe vehicle sales are likely to decline. Fitch expects to see free cash flow to be negative for many suppliers; it may be another year in which many suppliers restrict capital expenditures. Balance sheets for the auto suppliers are likely to remain damaged for some time. American Axle Fitch has removed the 'CCC' IDR from Rating Watch Negative and assigned a Stable Outlook to American Axle. The actions are based on Fitch's expectation that the company will succeed in finalizing two key related items: 1) an agreement with GM; and 2) an amendment with lenders. Both will need to occur to ensure that the company maintains access to liquidity. If both are completed, the company will receive a one-time payment of $110 million from GM. Furthermore, GM will offer American Axle a $100 million delayed-draw second lien term loan which extends through 2013 and American Axle can also receive expedited payments through the end of 2013. In return, American Axle will offer warrants to GM which will be up to 19.9% of its common shares (7.4% initially and up to an additional 12.4% if American Axle draws on the second lien term loan); it will also agree to an access and security agreement. These two items are expected to be completed by the end of August given that American Axle has received a second extension to its waiver and amendment which extends through Aug. 31, 2009. Fitch expects that lenders would be willing to consent to modifications to the credit agreement. As of June 30, 2009, American Axle's liquidity was $285 million consisting of $284 million in cash and equivalents and $1 million of availability on its revolving credit facility. The company was not in compliance with covenants as of June 30 and as a result, it drew down nearly all of the revolver. The secured revolver provides commitments of $476.9 million through April 2010. After that, the commitment is reduced to $369.4 million and expires in December 2011. Aside from the reduction in the size of the revolver in 2010 and its final maturity in 2011, American Axle does not have any debt maturities until its $250 million term loan is due in 2012. Fitch projects that American Axle will not generate free cash flow in 2009 following the negative free cash flow of $322 million in 2008, despite significant improvement and flexibility to its fixed cost structure. Capital expenditures are expected to be $140 million - $150 million, which would be flat to slightly higher than the $140 million spent in 2008. Dividends were suspended in January 2009 and cost-cutting efforts were made before and during the global automotive slump. Additional headwinds will come from the company's need to make pension and other retirement plan contributions in 2009. At the end of 2008, American Axle's pension plan was 55% funded, or $255 million underfunded. The company expects funding requirements to be $20 million in 2009. Other post-retirement obligations are expected to require $15 million of funding. ArvinMeritor ArvinMeritor's 'CCC' rating remains on Rating Watch Negative given Fitch's view that the company continues to face significant risks in its ability to execute the divestiture of the remaining assets in the light vehicle segment which have been a significant use of cash, the potential need for an amendment for covenant relief for the quarter ending Sept. 30, 2009, and ongoing weakness in truck demand in Europe. Fitch notes that ArvinMeritor has made some progress divesting assets in the light vehicle segment but concerns remain about shedding the rest of the assets given the cash burn from the segment and the company's potential for needing an amendment. Fitch expects that operating losses and restructuring costs will produce negative cash flows in 2009. Liquidity as of June 30, 2009 was $532 million consisting of $456 million of availability on the credit facility and $76 million of cash. ArvinMeritor has indicated that it requires $75 million to $100 million of liquidity for operations, and Fitch believes that even if this estimate proves to be conservative, ArvinMeritor's liquidity should be adequate for the near term provided lenders grant covenant relief on the credit agreement, if required. ArvinMeritor has no debt maturities until the bank agreement matures in 2011 and the company's pension is moderately underfunded in dollar terms. At the end of the last measurement date (June 30, 2008), it was underfunded by $115 million (or 7%). Given the performance of the equity markets since then, Fitch expects to see the underfunded status increase, which could require incremental contributions over the next several years. Tenneco The company's IDR of 'B-' has been removed from Rating Watch Negative and a Stable Outlook has been assigned. Fitch believes that the company has appropriate covenants for the challenging automotive environment, a diverse product offering and geographic distribution. In 2008, the company received approximately 20% of its revenues from GM and 2% from Chrysler. Like other suppliers, Tenneco felt the impact of the extended production shutdowns; however, with the production restarts at the auto makers and Tenneco's restructuring efforts, profits should improve in the second half of 2009 versus the first half. Liquidity as of June 30, 2009 was $444 million consisting of $333 million of availability on its credit facility and cash of $111 million. Liquidity excludes availability on the U.S accounts receivable program as well as the European accounts receivable programs, some of which can be canceled with 30 days notice. Furthermore, Tenneco once again can use receivables from GM and Chrysler in its $100 million U.S. accounts receivable program; this facility extends through February 2010. Importantly, the company does not have any significant debt maturities until 2012 when $700 million of the $830 million of the credit facility expires. Tenneco has a $249 million underfunded pension plan, which due to losses in the equity and fixed income markets in 2008, is likely to require incremental contributions over the near term. At the end of 2008, the pension plan's funding status was 59%. TRW Automotive Fitch has affirmed the 'B-' rating and removed the Rating Watch Negative. A Stable Outlook has also been assigned. The actions reflect improved operating performance, the recent equity issuance, a credit agreement amendment, and significant liquidity. In 2008, GM and Chrysler accounted for 13.5% and 9.6%, respectively, of TRW's sales globally in 2008. TRW recently raised equity and net proceeds were $269 million, all of which was earmarked for debt reduction. One-third of the net proceeds, or $89 million, was used to reduce the term loans while the balance was used to lower borrowings on the revolving credit facility. Liquidity at the end of the recent quarter was $1,476 million consisting of $905 million of credit facility availability and $571 million of cash. In June 2009, the company's credit agreement was amended and its financial covenants were reset for the more challenging automotive environment. Despite the termination of the U.S. accounts receivables securitization facility, a net decrease in European factoring facilities, and Fitch's expectation for negative cash flow in 2009, Fitch estimates that the company's liquidity profile should be sufficient over the near term. TRW has no near-term debt maturities and the revolver extends through 2012. The company's $600 million Term Loan A has required amortization of $54 million in 2010, $120 million in 2011, $225 million in 2012 and $150 million in 2013. TRW's $500 million Term Loan B also amortizes and requires payments of $2.75 million in 2009 and $0.5 million a year until the final payment in 2014. For more details on the auto suppliers, please see Fitch's report 'Liquidity Focus: U.S. Auto Suppliers', dated June 9, 2009. Readers should note that since that publication date, TRW Automotive was downgrade by one notch as noted in the TRW Automotive press release dated June 30, 2009. Fitch affirms these ratings: American Axle & Manufacturing, Inc. -- IDR 'CCC'; -- Senior secured bank facility 'B-/RR3'; -- Senior unsecured notes 'C/RR6'; -- Outlook Stable. American Axle & Manufacturing Holdings, Inc. -- IDR 'CCC'; -- Outlook Stable. Tenneco -- IDR 'B-'; -- Senior secured bank facility 'B+/RR2'; -- Senior secured second lien notes 'CC/RR6'; -- Senior unsecured notes to 'CC/RR6'; -- Subordinated notes 'CC/RR6'; -- Outlook Stable. TRW Automotive Holdings Corp. -- IDR 'B-; -- Outlook Stable. TRW Automotive, Inc. -- IDR 'B-'; -- Secured bank facility 'B+/RR2'; -- Senior unsecured notes 'CC/RR6'; -- Outlook Stable. This rating remains on Rating Watch Negative: ArvinMeritor -- IDR 'CCC' and on Rating Watch Negative; -- Secured 'B/RR1'; -- Senior unsecured 'CC/RR5'. AMERICAN CAPITAL: S&P Cuts Counterparty Credit Rating to 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its ratings on Bethesda, Maryland-based American Capital Ltd., including lowering the long-term counterparty credit rating to 'B-' from 'BB-'. The outlook is negative. The rating action reflects the accelerated deterioration in the firm's realized earnings and reported leverage in second-quarter 2009, as well as the weakening performance of its portfolio companies. The firm's coverage of interest by realized earnings that are not dependent on investment exits declined significantly to 1.0x in the second quarter from 1.8x in the previous quarter and 2.9x for 2008. Moreover, while S&P had expected further portfolio depreciation, the unrealized write-downs in the second quarter, coupled with the slowdown in investment exits, has driven leverage to 2.3x -- well above the 1.0x that had been required by covenants and is required for compliance with business development company regulations. "We believe that mending the firm's balance sheet will take an extended period during which it will continue to face uncertainty in negotiations with lenders. In S&P's opinion, the firm's financial woes and uncertain future increase ACAS' franchise risk, and could lead key personnel to depart for healthier investment firms," said Standard & Poor's credit analyst Jeffrey Zaun. S&P's concerns are partially offset by capital levels that continue to provide some cushion against losses. If ACAS is able to find some breathing room under its covenants, S&P believes management will be in a better position to shrink the firm's portfolio and pay down debt, which should improve leverage and debt-service coverage metrics. The negative outlook reflects S&P's expectation that the credit quality of the firm's loan portfolio will continue to deteriorate. It also takes into account uncertainty with respect to ACAS's ability to successfully negotiate covenant relief. S&P expect interest coverage will remain weak and that ACAS's access to equity or term funding could remain impaired well into 2010. "We could lower the rating further if ACAS is unable to negotiate covenant relief or if management is unable to improve leverage and coverage metrics. On the other hand, S&P could revise the outlook to stable if the firm can satisfactorily amend its debt covenants, improve its debt metrics, and stabilize its portfolio performance," Mr. Zaun added. ARVINMERITOR: Fitch Keeps Junk Issuer Default Rating ---------------------------------------------------- Fitch Ratings has taken these ratings actions on certain U.S. auto suppliers: American Axle -- Issuer Default Rating is affirmed at 'CCC', removed from Rating Watch Negative and assigned a Stable Outlook; ArvinMeritor -- IDR 'CCC' remains on Rating Watch Negative; Tenneco -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook; TRW Automotive -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook. The rating action concludes the Rating Watch that was initiated on Dec. 11, 2008, due to concerns about possible bankruptcies by General Motors and Chrysler LLC; following the bankruptcies by the two automakers, the Rating Watch remained in effect due to concerns about post-bankruptcy vehicle volumes at GM and Chrysler. ArvinMeritor remains on Rating Watch Negative for separate matters. Both GM and Chrysler emerged from Chapter 11 and the extended production shutdowns are complete. Furthermore, the auto supply base has not faced serious disruptions despite some bankruptcies such as Hayes-Lemmerz International, Lear Corporation, Metaldyne Corp. and Visteon Corp. While the Rating Watch has been removed, Fitch views the global automotive environment as challenging in the near term and on a longer term basis, the suppliers should benefit from the significant restructuring actions taken before and during the global automotive slump. Fitch continues to believe that North American vehicle sales volumes will improve in the second half of 2009 versus the first half of the year. Drivers for the modest improvements against the first half are the government's 'Cash for Clunkers' program which is nearly completed; aggressive vehicle pricing; consumers' access to vehicle financing which was difficult to obtain in the early part of 2009; and a reduction in dealer inventories. With higher production volumes, auto suppliers will be using cash for working capital needs in the second half of the year, and Fitch expects most suppliers should have adequate liquidity while production ramps up. Fitch believes this to be the case given that many suppliers have amended financial covenants to ensure access to revolving credit facilities. American Axle is currently trying to obtain covenant relief as well as other modifications to its credit agreement to ensure its access to liquidity as discussed below. Looking ahead to 2010, Fitch continues to see gains in vehicle sales in North America which should enable the suppliers to gain operating efficiencies; in Europe vehicle sales are likely to decline. Fitch expects to see free cash flow to be negative for many suppliers; it may be another year in which many suppliers restrict capital expenditures. Balance sheets for the auto suppliers are likely to remain damaged for some time. American Axle Fitch has removed the 'CCC' IDR from Rating Watch Negative and assigned a Stable Outlook to American Axle. The actions are based on Fitch's expectation that the company will succeed in finalizing two key related items: 1) an agreement with GM; and 2) an amendment with lenders. Both will need to occur to ensure that the company maintains access to liquidity. If both are completed, the company will receive a one-time payment of $110 million from GM. Furthermore, GM will offer American Axle a $100 million delayed-draw second lien term loan which extends through 2013 and American Axle can also receive expedited payments through the end of 2013. In return, American Axle will offer warrants to GM which will be up to 19.9% of its common shares (7.4% initially and up to an additional 12.4% if American Axle draws on the second lien term loan); it will also agree to an access and security agreement. These two items are expected to be completed by the end of August given that American Axle has received a second extension to its waiver and amendment which extends through Aug. 31, 2009. Fitch expects that lenders would be willing to consent to modifications to the credit agreement. As of June 30, 2009, American Axle's liquidity was $285 million consisting of $284 million in cash and equivalents and $1 million of availability on its revolving credit facility. The company was not in compliance with covenants as of June 30 and as a result, it drew down nearly all of the revolver. The secured revolver provides commitments of $476.9 million through April 2010. After that, the commitment is reduced to $369.4 million and expires in December 2011. Aside from the reduction in the size of the revolver in 2010 and its final maturity in 2011, American Axle does not have any debt maturities until its $250 million term loan is due in 2012. Fitch projects that American Axle will not generate free cash flow in 2009 following the negative free cash flow of $322 million in 2008, despite significant improvement and flexibility to its fixed cost structure. Capital expenditures are expected to be $140 million - $150 million, which would be flat to slightly higher than the $140 million spent in 2008. Dividends were suspended in January 2009 and cost-cutting efforts were made before and during the global automotive slump. Additional headwinds will come from the company's need to make pension and other retirement plan contributions in 2009. At the end of 2008, American Axle's pension plan was 55% funded, or $255 million underfunded. The company expects funding requirements to be $20 million in 2009. Other post-retirement obligations are expected to require $15 million of funding. ArvinMeritor ArvinMeritor's 'CCC' rating remains on Rating Watch Negative given Fitch's view that the company continues to face significant risks in its ability to execute the divestiture of the remaining assets in the light vehicle segment which have been a significant use of cash, the potential need for an amendment for covenant relief for the quarter ending Sept. 30, 2009, and ongoing weakness in truck demand in Europe. Fitch notes that ArvinMeritor has made some progress divesting assets in the light vehicle segment but concerns remain about shedding the rest of the assets given the cash burn from the segment and the company's potential for needing an amendment. Fitch expects that operating losses and restructuring costs will produce negative cash flows in 2009. Liquidity as of June 30, 2009 was $532 million consisting of $456 million of availability on the credit facility and $76 million of cash. ArvinMeritor has indicated that it requires $75 million to $100 million of liquidity for operations, and Fitch believes that even if this estimate proves to be conservative, ArvinMeritor's liquidity should be adequate for the near term provided lenders grant covenant relief on the credit agreement, if required. ArvinMeritor has no debt maturities until the bank agreement matures in 2011 and the company's pension is moderately underfunded in dollar terms. At the end of the last measurement date (June 30, 2008), it was underfunded by $115 million (or 7%). Given the performance of the equity markets since then, Fitch expects to see the underfunded status increase, which could require incremental contributions over the next several years. Tenneco The company's IDR of 'B-' has been removed from Rating Watch Negative and a Stable Outlook has been assigned. Fitch believes that the company has appropriate covenants for the challenging automotive environment, a diverse product offering and geographic distribution. In 2008, the company received approximately 20% of its revenues from GM and 2% from Chrysler. Like other suppliers, Tenneco felt the impact of the extended production shutdowns; however, with the production restarts at the auto makers and Tenneco's restructuring efforts, profits should improve in the second half of 2009 versus the first half. Liquidity as of June 30, 2009 was $444 million consisting of $333 million of availability on its credit facility and cash of $111 million. Liquidity excludes availability on the U.S accounts receivable program as well as the European accounts receivable programs, some of which can be canceled with 30 days notice. Furthermore, Tenneco once again can use receivables from GM and Chrysler in its $100 million U.S. accounts receivable program; this facility extends through February 2010. Importantly, the company does not have any significant debt maturities until 2012 when $700 million of the $830 million of the credit facility expires. Tenneco has a $249 million underfunded pension plan, which due to losses in the equity and fixed income markets in 2008, is likely to require incremental contributions over the near term. At the end of 2008, the pension plan's funding status was 59%. TRW Automotive Fitch has affirmed the 'B-' rating and removed the Rating Watch Negative. A Stable Outlook has also been assigned. The actions reflect improved operating performance, the recent equity issuance, a credit agreement amendment, and significant liquidity. In 2008, GM and Chrysler accounted for 13.5% and 9.6%, respectively, of TRW's sales globally in 2008. TRW recently raised equity and net proceeds were $269 million, all of which was earmarked for debt reduction. One-third of the net proceeds, or $89 million, was used to reduce the term loans while the balance was used to lower borrowings on the revolving credit facility. Liquidity at the end of the recent quarter was $1,476 million consisting of $905 million of credit facility availability and $571 million of cash. In June 2009, the company's credit agreement was amended and its financial covenants were reset for the more challenging automotive environment. Despite the termination of the U.S. accounts receivables securitization facility, a net decrease in European factoring facilities, and Fitch's expectation for negative cash flow in 2009, Fitch estimates that the company's liquidity profile should be sufficient over the near term. TRW has no near-term debt maturities and the revolver extends through 2012. The company's $600 million Term Loan A has required amortization of $54 million in 2010, $120 million in 2011, $225 million in 2012 and $150 million in 2013. TRW's $500 million Term Loan B also amortizes and requires payments of $2.75 million in 2009 and $0.5 million a year until the final payment in 2014. For more details on the auto suppliers, please see Fitch's report 'Liquidity Focus: U.S. Auto Suppliers', dated June 9, 2009. Readers should note that since that publication date, TRW Automotive was downgrade by one notch as noted in the TRW Automotive press release dated June 30, 2009. Fitch affirms these ratings: American Axle & Manufacturing, Inc. -- IDR 'CCC'; -- Senior secured bank facility 'B-/RR3'; -- Senior unsecured notes 'C/RR6'; -- Outlook Stable. American Axle & Manufacturing Holdings, Inc. -- IDR 'CCC'; -- Outlook Stable. Tenneco -- IDR 'B-'; -- Senior secured bank facility 'B+/RR2'; -- Senior secured second lien notes 'CC/RR6'; -- Senior unsecured notes to 'CC/RR6'; -- Subordinated notes 'CC/RR6'; -- Outlook Stable. TRW Automotive Holdings Corp. -- IDR 'B-; -- Outlook Stable. TRW Automotive, Inc. -- IDR 'B-'; -- Secured bank facility 'B+/RR2'; -- Senior unsecured notes 'CC/RR6'; -- Outlook Stable. This rating remains on Rating Watch Negative: ArvinMeritor -- IDR 'CCC' and on Rating Watch Negative; -- Secured 'B/RR1'; -- Senior unsecured 'CC/RR5'. ASARCO LLC: East Helena Smoke Stacks Demolished ----------------------------------------------- The three smoke stacks of ASARCO LLC in its East Helena, Montana facility were demolished on August 14, 2009, Eve Byron of Independent Record reports. The East Helena lead smelter has not been in operation since 2001. The iconic 200-foot, 400-foot and 425-foot stacks have stood for decades over East Helena. The demolition, which was witnessed by thousands of people scattered around the facility was an emotional moment for many residents, Ms. Byron says. "As history fell to the ground, I looked around the crowd and saw quite a few tears," Lewis and Clark County Sheriff Leo Dutton was quoted by the Independent Record as saying. "I picked up a piece of the stack . . . and will put it on my desk to memorialize this day," he added. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Parent Appeals SCC Bidders' Expense Reimbursements -------------------------------------------------------------- To recall, ASARCO LLC sought and obtained the Bankruptcy Court's approval for the reimbursement of expenses incurred by certain bidders in connection with the potential auction and sale of all or a portion of the judgment entered on April 15, 2009, by the U.S. District Court for the Southern District of Texas, Brownsville Division, in favor of ASARCO LLC, in the litigation against Americas Mining Corporation relating to shares of Southern Peru Copper Company, now known as Southern Copper Corporation. Americas Mining Corporation and Asarco Incorporated notified the U.S. Bankruptcy Court for the Southern District of Texas that they will take an appeal to the U.S. District Court for the Southern District of Texas of Judge Schmidt's Expense Reimbursement Order dated July 29, 2009, with respect to expenses incurred by certain bidders in connection with the potential auction and sale of all or a portion of the judgment entered on April 15, 2009, by the U.S. District Court for the Southern District of Texas, Brownsville Division, in favor of ASARCO LLC, in the litigation against Americas Mining Corporation relating to shares of Southern Peru Copper Company, now known as Southern Copper Corporation. The Parent wants the District Court to determine whether the Bankruptcy Court erred: (1) as a matter of law, in approving ASARCO LLC's Reimbursement Motion; (2) in approving the Reimbursement Motion pursuant to Section 363 of the Bankruptcy Code; (3) in finding that the Expense Reimbursement is "fair, reasonable, and appropriate" and "designed to maximize the value of ASARCO's estate"; (4) in finding that ASARCO established a "compelling and sound business justification for the Expense Reimbursement"; (5) in finding that approval of Expense Reimbursements is "in the best interests of ASARCO and its estate, creditors, interest holders, stakeholders, and all other parties in interest"; (6) in approving the procedures and guidelines for Expense Reimbursements set forth in the Reimbursement Motion, including procedures related to notice, determination of notice parties, objections, and disposition of objections; (7) in authorizing and empowering ASARCO to take steps, expend sums of money, and do other things to implement and effect the Reimbursement Order; (8) in granting ASARCO's request to file under seal Exhibits B and C of the Reimbursement Motion; and (9) in sealing Exhibits B and C of the Seal Motion and Exhibits 3, 4, and 5 at the hearing on the Seal Motion. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Wants Plan Related Documents From Parent ---------------------------------------------------- The Bankruptcy Court previously partly denied ASARCO LLC's request to compel the production of financial documents and communications because the counsel for Americas Mining Corporation and Asarco Incorporated argued that the requested communications were confidential and that producing those sensitive information could potentially harm negotiations between the Parent and any banking institutions. The Court, however, ordered that once the Parent had a commitment letter or definitive financing agreement, the Parent would be required to produce those documents and tender a witness for deposition. When the Court asked the Parent's counsel when it expected to receive a signed commitment letter, the Parent responded "some time toward the end of July." The Court then made clear that "if [the Parent] don't get the commitment letter they ain't going to get their plan confirmed," relates Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas. Mr. Kinzie contends that the Confirmation Hearing is ongoing, and despite the Parent's assurance and the Court's subsequent statement, the Parent still has not produced a binding commitment. He also points out that while the Parent has indicated that it is working on its commitment, it also suggested that it "expects" to get a financing commitment "when [it] knows [it has] a confirmed plan," but is deferring finalizing the commitment because doing so "would require the expenditure of tens of millions of dollars of commit[ment] fees." Mr. Kinzie contends that the Parent presumably has responsive financial documents at this late stage of the confirmation process. He emphasizes that to determine the feasibility of the Parent's Amended Chapter 11 Plan, all interested parties should be entitled to see and analyze terms of any financing agreement. By this motion, ASARCO asks the Court to compel the Parent to produce financing documents and communications with any financial institutions. The financing documents continue to be relevant to the feasibility of the Parent Plan -- specifically, the Parent's ability to finance its Plan -- and the Parent's previously articulated reasons for withholding those documents communications are no longer justified, Mr. Kinzie argues. He points out that without access to communications between the Parent and possible lenders of financing to fund the Parent Plan, neither ASARCO nor the Court can determine the likelihood that the Parent will be able to finance the Parent Plan or assess the terms of any financing. ASARCO also sought and obtained the Court's nod for an expedited hearing on the request. ASARCO Seeks Docs on Seventh Amended Plan In a subsequent emergency request, ASARCO asks the Court to compel the Parent to produce documents relevant to the Parent's Seventh Amended Plan of Reorganization filed on August 17, 2009. ASARCO contends that the Court should order the Parent to produce the requested financing documents and communications between the Parent and financial institutions because they continue to be relevant to the Parent's ability to finance its Plan. Mr. Kinzie relates that the Parent has produced a draft form of a commitment letter, which according to the Parent will provide the means by which the Parent will fund $1.5 billion of the consideration under the Parent's Seventh Amended Plan. The Parent has also produced a draft form of an Indicative Term Sheet. "The Draft Commitment Letter and Indicative Term Sheet fail to provide sufficient information to enable the parties or the Court to determine whether the Parent can finance the amounts required to fund its obligations under the Seventh Amended Plan," Mr. Kinzie argues. "This court cannot rely upon redacted unexecuted commitment letters in making the decision about whether to confirm the Parent's Plan," Mr. Kinzie says. "The Parent must demonstrate its ability to obtain this [$1.5 billion] financing, while at the same time fulfilling all of its other obligations under the Seventh Amended Plan, and in a manner that does not hamper Reorganized ASARCO's ability to operate effectively post- confirmation," he adds. Mr. Kinzie insists that the two redacted documents that the Parent has produced woefully fall short of demonstrating the Parent's ability to meet its obligations, and in no manner enable the Debtors or the Court to test the Parent's ability to do so. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASSOCIATED CONTRACTING: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Associated Contracting, LLC P.O. Box 458 West Liberty, KY 41472 Bankruptcy Case No.: 09-10514 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Eastern District of Kentucky (Ashland) Debtor's Counsel: Dean A. Langdon, Esq. 200 N Upper St Lexington, KY 40507 Tel: (859) 231-5800 Email: langdonbk@wisedel.com Total Assets: $1,211,094 Total Debts: $22,145,234 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/kyeb09-10514.pdf The petition was signed by L. Barrett Frederick, registered agent of the Company. ATLANTIC CITY HILTON: Defaults on Monthly Interest Payment of Loan ------------------------------------------------------------------ Atlantic City Hilton Casino Resort said in a filing with the New Jersey Casino Control Commission for the quarter ended June 30, 2009, that it failed to make its monthly interest payment and other monthly funding requirements related to a loan agreement, due to the severe impact of the current economic conditions. On April 26, 2005, RIH Acquisitions NJ, LLC, acquired most of the assets and assumed certain liabilities of four casino properties, including ACH, from Caesars Entertainment Inc. and Harrah's Entertainment Inc. The debt incurred to finance the Acquisition (the Term Loans) was carried on the balance sheet of RIH and was not allocated to the Company. In October 2006, RIH refinanced its outstanding debt by entering into a Commercial Mortgage Backed Security with JP Morgan Chase. The Loan Agreement has a principal amount of $960 million. Under the Loan, the total principal is allocated to each of the RIH operating properties including ACH. The Loan originally was to mature November 9, 2008, and included the option to extend the life of the Loan for three successive terms of one year each. In November 2008, RIH exercised this option and extended the term of the loan for at least one year. The Loan Agreement does not require periodic principal payments prior to the maturity date. However, monthly interest payments are required using a rate of LIBOR plus 2.65%. As of June 30, 2009, the interest rate was approximately 2.97%. On July 9, 2009, the Company failed to make its monthly interest payment and other monthly funding requirements related to the Loan Agreement. This triggered an event of default of its obligations under that loan agreement. Since then, the Company has been in negotiations with the lender to modify the terms of the loan agreement. As of June 30, 2009, the outstanding indebtedness under the Loan Agreement was $348.2 million, plus related accrued interest of $868,000. The cash flows of ACH and the other casino properties acquired by RIH are the only source to fund the interest payments of the debt issued by RIH. Substantially all of the Company's assets are pledged as collateral on the RIH credit facility, and the Company is named as a guarantor on RIH's credit agreement. As of June 30, 2009, ACH reported $408,230,000 in total assets, $372,082,000 in liabilities, and $36,148,000 in stockholders', partners', or proprietor's equity. The Company's financial statements are available at: http://ResearchArchives.com/t/s?42e2 About Atlantic City Hilton Atlantic City Hilton was first built by Steve Wynn in 1980 and named Golden Nugget Atlantic City. The Resorts Atlantic City and Atlantic City Hilton are managed as a single entity. ATTORNEYS TITLE INSURANCE: AM Best Downgrades Credit Rating to C- ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C- (Weak) from C (Weak) and issuer credit rating to "cc" from "ccc" of Attorneys' Title Insurance Fund Inc. (Orlando, FL). The outlook for both ratings is negative. The downgrades reflect the reduced capitalization of the Fund as reflected by a reduction of policyholders' surplus from $27 million at year-end 2008 to approximately $6 million as of second quarter 2009. Concurrently, A.M. Best has assigned a category NR-4 to the FSR and an "nr" to the ICR in response to a request from the Fund's management to withdraw from A.M. Best's interactive rating process. This request follows the formation of a joint venture between the Fund and Old Republic National Title Insurance Company (Old Republic), whereby effective July 1, 2009, a managing title agent (MTA) is responsible for issuing all new policies written exclusively on Old Republic's paper. Consequently, the Fund will no longer write any new business but will continue to cover claims on previously issued Fund policies. Attorneys' Title Insurance Fund, Inc. -- http://www.thefund.com/- - is Florida's leading title insurance underwriter and title information provider. The Fund supports the needs and promotes the success of attorneys' real estate practices by providing valuable, relevant, and timely information, as well as innovative products and services that allow attorneys to conduct transactions electronically, easily, and efficiently. AVISTAR COMMUNICATIONS: Nasdaq to Delist Shares Effective Aug. 31 ----------------------------------------------------------------- The Nasdaq Stock Market, LLC, has determined to remove from listing the common stock of Avistar Communications Corporation, effective at the open of business on August 31, 2009. Based on a review of information provided by the Company, Exchange Staff determined that the Company no longer qualified for listing on the Exchange as it failed to comply with Rule 5505(b)(2). (Rule 5505(b)(2) was enumerated as Rule 4310(c)(2)(B) at the time of the determination.) On December 24, 2008, after review of the Company's compliance plan, staff notified the Company that its shares would be delisted unless it requested a hearing. On December 30, the Company exercised its right to appeal the Exchange Staffs determination to the Listing Qualifications Hearings Panel pursuant to Rule 5815(a)(1)(A). Upon review of the information provided by the Company, by decision dated April 2, 2009, the Panel determined to grant an extension to the Company until June 22. On June 3, the Company requested that the Panel grant it an extension beyond June 22. On June 12, the Panel issued a decision affirming its April 2 decision. On June 17, the Company exercised its right to appeal the June 12 Panel decision to the Nasdaq Listing and Hearing Review Council (the Council) pursuant to Rule 5820(a). The Company's securities were suspended from trading on the Exchange at the open of trading on June 24. On August 6, 2009, the Company withdrew its appeal to the Council. The Company posted a net loss of $151,000 for the three months ended June 30, 2009, from a net loss of $1,612,000 for the same period a year ago. The Company posted a net loss of $566,000 for the six months ended June 30, 2009, from a net loss of $5,379,000 for the same period a year ago. As of June 30, 2009, the Company had $4,162,000 in total assets and $15,279,000 in total liabilities, resulting in stockholders' deficit of $11,117,000. On December 22, 2008, the Company renewed its Revolving Credit and Promissory Note and a Security Agreement with a financial institution to borrow up to $10.0 million under a revolving line of credit. The agreement includes a first priority security interest in all of its assets. Gerald Burnett, its Chairman, provided a collateralized guarantee to the financial institution, assuring payment of its obligations under the agreement and as a consequence, there are no restrictive covenants, allowing the Company greater access to the full amount of the facility. In addition to the guarantee provided to the financial institution, on March 29, 2009, Dr. Burnett provided a personal guarantee to the Company assuring it a line of credit of $10.0 million with the same terms and mechanisms as the existing revolving line of credit in the event the existing revolving line of credit from the financial institution was unavailable for any reason during the period from its termination on December 21, 2009 to March 31, 2010. The line of credit required monthly interest-only payments based on Adjusted LIBOR plus 1.25% or Prime Rate plus 1.25%. The Company elected Prime Rate plus 1.25% or 4.5% at June 30, 2009 and December 31, 2008. In January 2009, the Company repaid $3.9 million of the $7.0 million revolving line of credit outstanding as of December 31, 2008. The Company borrowed $2.0 million under the revolving line of credit for the six months ended June 30, 2009, and have a balance of $5.1 million outstanding as of June 30, 2009. The Revolving Credit and Promissory Note matures on December 21, 2009, and is subject to annual renewal with the consent of the Company and the lender. On January 4, 2008, the Company issued $7,000,000 of 4.5% Convertible Subordinated Secured Notes, which are due in 2010. The Notes were sold pursuant to a Convertible Note Purchase Agreement to Baldwin Enterprises, Inc., a subsidiary of Leucadia National Corporation, directors Gerald Burnett, R. Stephen Heinrichs, William Campbell, and Craig Heimark, officers Simon Moss and Darren Innes, and WS Investment Company. The Company's obligations under the Notes are secured by the grant of a security interest in substantially all of its tangible and intangible assets pursuant to a Security Agreement between the Company and the purchasers. The Notes have a two-year term, will be due on January 4, 2010 and are convertible prior to maturity. Interest on the Notes accrues at the rate of 4.5% per annum and is payable semi-annually in arrears on June 4 and December 4 of each year. Commencing on the one-year anniversary of the issuance of the Notes, the Note holders became entitled to convert the Notes into common stock at an initial conversion price of $0.70 per share. In May 2009, the Company issued a total of 4,199,997 shares of common stock to Gerald Burnett, R. Stephen Heinrichs, William Campbell, Craig Heimark, Simon Moss and WS Investment Company upon their election to convert their notes with an aggregate principal amount of $2.9 million into common stock. The Company said $4.1 million in notes remained outstanding as of June 30, 2009. "As of June 30, 2009, we had no material off-balance sheet arrangements, other than the operating leases. We enter into indemnification provisions under agreements with other companies in our ordinary course of business, typically with our contractors, customers, landlords and our investors. Under these provisions, we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities or, in some cases, as a result of the indemnified party's activities under the agreement. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is generally unlimited. As of June 30, 2009, we have not incurred material costs to defend lawsuits or settle claims related to these indemnifications agreements and therefore, we have no liabilities recorded for these agreements as of June 30, 2009," the Company said. "We are currently in discussions with the remaining holders of the Notes to convert the Notes into shares of common stock in January 2010 or extend the term of the Notes. Assuming the successful conversion or extension of the Notes in conjunction with the results of our cost reduction efforts, including Dr. Burnett's personal guarantee to Avistar to support an extension of the revolving line of credit, we believe that our existing cash and cash equivalents balance and line of credit will provide us with sufficient funds to finance our operations for the next 12 months. We intend to continue to invest in the development of new products and enhancements to our existing products. Our future liquidity and capital requirements will depend upon numerous factors, including without limitation, whether or not the holders of the Notes elect to convert such Notes into our common stock, general economic conditions and conditions in the financial services industry in particular, the level and timing of product, services and patent licensing revenues and income, the maintenance of our cost control measures structured to align operations with predictable revenues, the costs and timing of our product development efforts and the success of these development efforts, the costs and timing of our sales, partnering and marketing activities, the extent to which our existing and new products gain market acceptance, competing technological and market developments, and the costs involved in maintaining, defending and enforcing patent claims and other intellectual property rights, all of which may impact our ability to achieve and maintain profitability or generate positive cash flows. "From time to time, we may be required to raise additional funds through public or private financing, strategic relationships or other arrangements. There can be no assurance that such funding, if needed, will be available on terms attractive to us, or at all. Furthermore, any additional debt or equity financing arrangements may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants. Strategic arrangements, if necessary to raise additional funds, may require us to relinquish some or all of our rights to certain of our technologies or products. Our potential inability to raise capital when needed could have a material adverse effect on our business, operating results and financial condition," the Company said. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?42ec About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. BEAZER HOMES: Moody's Assigns Default Rating at 'Caa2/LD' --------------------------------------------------------- Moody's Investors Service assigned a Caa2/LD probability of default rating to Beazer Homes USA, Inc., following the company's repurchase of $115.5 million face value of senior unsecured notes for an aggregate purchase price of $58.2 million in the quarter ended June 30, 2009. The open market transactions, considered together, constitute a distressed exchange and a limited default under Moody's definition. The LD designation signifies a limited default and also incorporates Moody's expectations of additional open market transactions at substantial discounts to par over the next twelve months. The ratings on the senior notes impacted by the open market transactions were lowered to Ca from Caa2 to reflect the approximate 50% losses incurred by participating bondholders. After approximately three business days, Moody's will remove the LD designation on the PDR and change the ratings on the company's senior notes back to Caa2, which is consistent with Moody's LGD (loss given default) framework. As a result of the distressed exchange transaction (as well as the expectation for future transactions of this type), these rating actions were taken: * Probability of default rating changed to Caa2/LD from Caa2; * Senior unsecured notes lowered to Ca (LGD4, 50%) from Caa2 (LGD4, 56%); Moody's most recent announcement concerning the ratings for Beazer was on March 6, 2009, at which time Moody's lowered the company's corporate family rating to Caa2 from B2. Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc., is one of the country's ten largest single-family homebuilders with operations in 17 states. Homebuilding revenues and consolidated net income the trailing 12 months ended June 30, 2009, were approximately $1.4 billion and ($700) million, respectively. BEREAN CHRISTIAN: Sold to 2 Investors, Operations Continue ---------------------------------------------------------- Jon Newberry at Business Courier of Cincinnati reports that Berean Christian Stores Endeavor LLC CEO Bill Simmons will continue to run Berean Christian Stores, LLC's operations, while Joseph and Deanna Gimelli will serve on the board. As reported by the Troubled Company Reporter on June 16, 2009, Berean Christian Stores said that Berean Christian Stores Endeavor would serve as a "stalking horse" bidder to draw out other interested buyers for the Company. Business Courier relates that Berean Christian Stores was sold in a "going concern" bankruptcy sale to the Gimellis in July for $2 million. Business Courier quoted Berean Christian Stores CEO Bill Simmons as saying, "The good news is that our facility here in West Chester will remain intact. If anything, we might be adding some over 12 to 18 months." According to Business Courier, the sale didn't result in layoffs. Berean Christian Stores, LLC, is based in West Chester, Ohio. The Company filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. S.D. Ohio Case No. 09-13640). Kasey T. Ingram, Esq., at Dinsmore & Shohl LLP assists the Company in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in debts. BERNARD MADOFF: Prosecutors Want DiPascali's Assets Seized ---------------------------------------------------------- According to David Glovin at Bloomberg News, federal prosecutors asked a judge to order the seizure of Frank DiPascali's 61-foot fishing boat, Dorothy Jo; a 2009 Audi S5 Quatro; and two Mercedes Benz cars. The Dorothy Jo has been in custody of federal marshals in Florida since April 29, suggesting that Mr. DiPascali has been cooperating in a U.S. probe since then, Bloomberg said. Mr. DiPascali, the former finance chief at Bernard L. Madoff Investment Securities LLC, pleaded guilty on Aug. 11 and was ordered to prison. As reported by the TCR on August 13, the Securities and Exchange Commission on August 11 charged Mr. DiPascali with securities fraud for overseeing the mechanics of Bernard Madoff's entirely fictitious investment strategy and creating millions of phony documents and trading records to conceal the fraud from regulators and investors. According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, Mr. DiPascali helped generate bogus annual returns of 10% to 17% by fabricating backdated and fictitious trades that never occurred. The SEC further alleges that DiPascali helped Madoff cover up the fraud by preparing fake trade blotters, stock records, customer confirmations, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate the non-existent trading. "DiPascali and Madoff ran an extraordinary and massive counterfeiting operation that concealed their fraud from investors and regulators alike," said Robert Khuzami, Director of the SEC's Division of Enforcement, in the complaint. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BERNARD MADOFF: Not Terminally Ill, Says Bureau of Prisons ---------------------------------------------------------- Bernard Madoff, who is serving 150 years in prison for defrauding investors of billions of dollars, hasn't been diagnosed with cancer and isn't terminally ill, the Federal Bureau of Prisons said, according to reporting by David Glovin at Bloomberg News. The New York Post had reported August 24 that Mr. Madoff was dying from a cancer and that there were rumors he had pancreatic cancer. "While the N.Y. Post story is full of inaccuracies, and we can't specifically address all of them, we can tell you that Bernie Madoff is not terminally ill, and has not been diagnose with cancer," Bureau of Prisons spokeswoman Traci Billingsley said in a statement, Bloomberg reported. Mr. Madoff, 71, is in a medium-security federal prison in Butner, North Carolina, which also has a medical center. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. stocks, including all of the S&P 500 and more than 350 Nasdaq stocks. The firm moved large blocks of stock for institutional clients by splitting up orders or arranging off-exchange transactions between parties. It also performed clearing and settlement services. Clients included brokerages, banks, and other financial institutions. In addition, Madoff Securities managed assets for high-net-worth individuals, hedge funds, and other institutional investors. The firm is being liquidated in the aftermath of a fraud scandal involving founder Bernard L. Madoff. As reported by the Troubled Company Reporter on December 15, 2008, the Securities and Exchange Commission charged Mr. Madoff and his investment firm with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated losses from Mr. Madoff's fraud were allegedly at least US$50 billion. Also on December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. Irving H. Picard, Esq., was appointed as trustee for the liquidation of BLMIS, and Baker & Hostetler LLP was appointed as counsel. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors. BIOPURE CORPORATION: OPK to Purchase All Assets for $4 Million -------------------------------------------------------------- Biopure Corporation said in a regulatory filing that on August 18 it concluded the auction of substantially all of its assets in connection with its bankruptcy proceedings. OPK Biotech LLC will purchase substantially all of Biopure's operating assets pursuant to an asset purchase agreement for a purchase price of $4,050,000. The Bankruptcy Court has approved this purchase and sale, which remains subject to customary closing conditions and certain purchase price adjustments. Biopure also designated a lower bid as a "back-up" bid pursuant to bidding procedures previously approved by the Court. Biopure will work diligently with OPK to close the sale in the next 30 days. On the same auction date, an affiliate of OPK agreed to purchase Biopure's 50% interest in a partnership that owns the building housing Biopure's headquarters and some laboratory space for $850,000, subject to bankruptcy court approval, which is expected to be sought in early September, and subject to closing conditions. Biopure also designated a lower bid as a "back-up" bid pursuant to the bidding procedures. Biopure does not expect that Biopure stockholders will receive any substantial distributions resulting from these transactions and expects that the bankruptcy proceedings will ultimately result in the cancellation of these equity interests. Further information and copies of the relevant documents may be obtained at http://www.craigmacauley.com/BiopurePleadings.html About Biopure Corp. Based in Cambridge, Massachusetts, Biopure Corporation -- http://www.biopure.com/-- develops and markets pharmaceuticals, called oxygen therapeutics, that are intravenously administered to deliver oxygen to the body's tissues. Biopure filed for Chapter 11 bankruptcy protection on July 16, 2009 (Bankr. D. Mass. Case No. 09-16725). Christopher J. Panos, Esq., at Craig and Macauley, P.C., assists the Debtor in its restructuring efforts. The Debtor listed $5,076,000 in assets and $2,729,000 in debts. BRADKEN INC: Moody's Downgrades Corporate Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service lowered Atchison, Kansas based Bradken, Inc. (formerly known as AmeriCast Technologies, Inc.)'s Corporate Family Rating to B3 from B2, and rating on the senior unsecured notes due 2014 to Caa1 from B3. The rating outlook is negative. The downgrade reflects Moody's expectation that Bradken's operating and credit metrics will deteriorate significantly in the next 6-12 months, driven by substantially weakened demand from most of its end markets. Bradken reported a 16% revenue decline during its third quarter (March 2009), compared to the prior year period, and thinning order backlog. Moody's notes that the decline in demand for Bradken's heavy steel casting products accelerated in the recent past and expects the demand to sustain at a depressed level throughout the intermediate term despite some early signs of stabilization in the global economy. "The recovery in demand of its products generally lags a full recovery of general economy by 6-9 months based on historical experience," commented Moody's analyst John Zhao. In particular, Moody's expects some end markets, such as locomotive, construction and mining, would likely be the most challenged. Its energy segment which mainly serves the oil and gas industry, would also face significant downward topline pressure due to anticipated low activity in exploration and production. While the company has taken significant steps to reduce operating expenses such as headcount reduction, Moody's believe that Bradken's small size and potential sudden disruption of revenue steam due to its significant customer concentration (most pronounced in the construction & mining, and locomotive end markets) may constrain its ability to adapt to deteriorating market conditions. Consequently, Moody's expects that credit metrics, such as operating income and cash flow, will deteriorate significantly. The B3 rating positively considers Bradken's leading position in the niche large steel casting market, high barrier to entry due to size and complexity of main products and high start-up cost, and its long-term, sole-source based relationship with its major customers. The rating also recognizes the company's relatively modest leverage and adequate interest coverage in part due to voluntary debt reduction completed in the past year. The B3 rating however, is constrained by its small scale, heavy exposure to cyclical end market, acquisitive nature and significant customer concentration. The negative outlook reflects the pace and magnitude of the recent deteriorating trend in revenues and Moody's concern on the timing of the potential recovery in demand. The outlook also depicts the company's weakening (though still adequate) liquidity position, reflective of the lower free cash flow generation as well as the eroding cushion above the $8 million excess borrowing availability threshold under its asset-based revolving credit facility (not rated by Moody's) in the next twelve months. Moody's cautions that the company's ability to remain in compliance with the covenant will become uncertain if a fixed charge springing covenant would be triggered when the revolver availability fell below the threshold. The rating could be further downgraded if the combined liquidity (cash + available revolver) drops below $20 million on a sustained basis. The rating action is: * Corporate Family Rating -- downgraded to B3 from B2 * Probability of Default rating -- downgraded to B3 from B2 * $105 million ($69 million outstanding) of senior unsecured notes due 2014 -- downgraded to Caa1 (LGD5, 78%) from B3 (LGD4, 62%) * Rating outlook -- revised to negative from stable The last rating action on Bradken occurred on November 8, 2006 when the first time rating was assigned at B2 CFR. Bradken, Inc., headquartered in Atchison, Kansas, is a designer and manufacturer of large, highly engineered steel and iron castings. Products include locomotive and transit trucks, mining truck frames, axle housings, valve bodies, compressor housings, pumps, Navy ship cast components, power generation turbine steel castings, and offshore platform structural parts. The company is wholly owned by Bradken Limited, an Australia based engineering company. CALYPTE BIOMEDICAL: Delays Filing of June 30 Quarterly Report ------------------------------------------------------------- Calypte Biomedical Corporation failed to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009. The principal reasons for the Company's inability to file the Second Quarter 10-Q at this time are: (1) the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, was not timely filed, but was filed on April 27, 2009; (2) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009, was not timely filed, but was filed on August 7, 2009, because the Company could not begin preparation of the consolidated financial statements and the First Quarter Form 10-Q, with all the required disclosures, until it completed the Form 10-K; (3) the Company has been preparing responses to a comment letter dated July 16, 2009, received from the Securities and Exchange Commission regarding the Company's application of certain accounting policies to its treatment of long term assets and stock options in its audited consolidated financial statements for the fiscal year ended December 31, 2008 contained in its Form 10-K; and (4) the Company has not yet received necessary financial information from its Chinese subsidiaries. As a result of the Company's inability to timely file the Form 10- K and the First Quarter Form 10-Q and the other events, the Company requires additional time to complete the preparation of its consolidated financial statements for the June 30 quarter, have them properly certified by the executive officers, and have them reviewed by its independent auditors. For the quarterly period ended March 31, 2009, the Company posted a net loss of $1,242,000 from a net loss of $2,093,000. As of March 31, 2009, the Company had total assets of $6,292,000 and total liabilities of 19,700,000, resulting in stockholders' deficit of $13,408,000. As of March 31, 2009, the Company had a working capital deficit of $15,500,000. Its cash balance at March 31, 2009, was $200,000, which it does not believe is sufficient to enable it to fund operations through the remainder of 2009. The Company said a total of $10,900,000 was payable under its 8% Convertible Notes and related Interest Notes and 7% Promissory Notes on April 3, 2009. "We are currently discussing termination, reduction or restructuring of these debt obligations with each of the secured creditors. Further, given the current market price of our common stock, we have insufficient authorized shares of common stock available to raise adequate capital to continue our operations. We do not have any definitive agreements with respect to additional financing or a strategic opportunity, and there is no assurance that any such financing or strategic opportunity will be available to us on acceptable terms, or at all. If such additional financing is not available to us when required or is not available to us on acceptable terms, or we are unable to arrange a suitable strategic opportunity, we will be in significant financial jeopardy and we may be unable to continue our operations at current levels, or at all. Our failure to obtain additional financing or to resolve the existing defaults with respect to the 7% Promissory Notes and the 8% Convertible Notes will likely cause us to seek bankruptcy protection under Chapter 7 of Title 11 of the United States Code, which would have a material adverse affect on our business and on our ability to continue our operations," the Company said. A full-text copy of the March 2009 quarterly report is available at no charge at http://ResearchArchives.com/t/s?42ed The Company also filed Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on April 27, 2009, to amend and restate Item 9A of Part II of the Original Filing to include management's conclusion regarding the effectiveness of the Company's internal control over financial reporting as of the end of the period covered by the Original Filing. No other information in the Original Filing is amended. A full-text copy of the Amended filing is available at no charge at http://ResearchArchives.com/t/s?42e3 Calypte Biomedical Corporation develops, manufactures, and distributes in vitro diagnostic tests, primarily for the diagnosis of Human Immunodeficiency Virus infection. Since September 8, 2006, its common stock has traded on the NASD Over the Counter Bulletin Board under the symbol "CBMC." During the third quarter 2007, it combined its research and development operations and our administrative offices in a facility in Portland, Oregon that also includes space for manufacturing operations. Prior to that, its administrative offices were located in Lake Oswego, Oregon, a suburb of Portland, near where the research and development operations were located. Through its 51%-owned joint ventures, the Company has manufacturing and marketing operations in Beijing, China. CARROLL COUNTY: S&P Downgrades Rating on $20 Mil. Bonds to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating on Carroll County, Maryland's $20.0 million series 1999A bonds issued for EMA Obligated Group (Fairhaven & Copper Ridge) to 'BB-' from 'BB' due to continued operating losses, lower liquidity, and softer occupancy levels. Key credit factors include diminished liquidity in 2009 due to a net increase of $19 million of new bonds since 2007 resulting in low cash to debt of 12%; softer occupancy at all three of EMA's continuing-care retirement communities (CCRC) due to general economic conditions; diminished operating losses year to date, with a negative 5.2% operating margin for the five months ended May 31, 2009, compared with 9%-14% operating losses in 2004-2008; and a competitive environment, with several competing facilities in the area. Supporting the rating is EMA's strong management team with a record of improvement in financial and strategic planning processes; however, the organization is operating with an interim chief financial officer and the CEO has announced his intention to retire. "The stable outlook reflects S&P's recognition of management's actions to improve operations year to date and the activities that are planned for further improvement," said Standard & Poor's credit analyst Liz Sweeney. "A key risk over the next year includes the expected opening this fall of 44 new assisted-living units at the William Hill Manor campus and the related fill-up and stabilization risk, during a difficult economic period for adding new capacity," said Ms. Sweeney. Other challenges include maintaining occupancy levels in general, rebuilding liquidity, and recruiting a new CEO and CFO. A longer- term challenge will be renovation needs for the independent-living component at the William Hill campus. Factors that could cause rating pressure over the next one to two years include failure to improve operating results as expected, further declines in liquidity, or unexpected additional debt, although management currently has no imminent plans for additional borrowing. Standard & Poor's believes that the organization's diversity, the strength of its CCRC product offerings, and the sophistication of management could ultimately support a higher rating if the financial profile improves over time. CHAMPION ENTERPRISES: S&P Cuts Corporate Credit Rating to 'CC' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including its corporate credit ratings, on Champion Enterprises Inc. and its wholly owned subsidiary, Champion Home Builders Co. S&P lowered the corporate credit ratings to 'CC' from 'CCC-'. S&P's recovery ratings are unchanged. The outlook is negative. "The rating action reflects the increased likelihood of a debt restructuring, which S&P would view as distressed and tantamount to default," said Standard & Poor's credit analyst George Skoufis. At the end of the second quarter, the company was not in compliance with the amended financial covenants contained in its bank credit facility. In addition to seeking an amendment to the credit facility, Champion is exploring other alternatives, which could include a debt restructuring. The outlook is negative. S&P would lower the ratings to 'SD' (selective default) if the company completes a distressed debt restructuring, or to 'D' if the company files for bankruptcy protection or misses an interest payment. S&P would raise the ratings if Champion and its lenders agree on a longer-term amendment that does not result in a distressed exchange or restructuring. CHARTER COMMUNICATIONS: Plan May Have Reached Impasse ----------------------------------------------------- Charter Communications, Inc., and its subsidiaries' proposed Chapter 11 plan of reorganization may have reached an impasse after bondholders contend that allowing Paul Allen to retain control of the company post-bankruptcy only benefits the Microsoft co-founder, the New York Post reported. According to the report, sources said that after spending the summer in a legal back-and- forth, the banks opposing the Plan and bondholders who sponsored the Plan are not talking, setting the stage for the tussle to be decided in a courtroom sometime in the next month. Pre-bankruptcy Charter reached agreement with majority of the holders of notes issued by units CCH I, LLC and CCH II notes and controlling shareholder Paul Allen on the terms of a consensual, prearranged Plan. The deal contemplates the investment by members of the Bondholder Committee of more than $3 billion, including up to $2 billion in equity proceeds, $1.2 billion in roll-over debt and $267 million in new debt to support the overall refinancing. Paul Allen will continue as an investor, and will retain the largest voting interest in the Company. JPMorgan is the administrative agent for the Amended and Restated Credit Agreement, dated as of March 18, 1999, with CCO Holdings, LLC as guarantor and certain lenders, and other parties, however, have objected, citing that the Plan allows Mr. Allen to receive in excess of $2 billion in benefits and full releases in exchange for mostly out of the money claims and interests. Law Debenture, as the Indenture Trustee with respect to the $479 million in aggregate principal amount of 6.50% Convertible Senior Notes due 2027 issued by Charter Communications Inc., pointed out that although the holders of CCI Notes Claims are not being paid in full, distributions are being provided to Charter's controlling shareholder, Paul Allen, on account of his equity interests in Charter in direct violation of the absolute priority rule. The banks have asked for one or two percentage points more in interest on their roughly $8 billion in debt, several sources said, according to the New York Post. That would amount to between $80 million and $160 million a year extra for Charter, which after the reorganization expects to generate $300 million annually in free cash flow. As to the alleged $2 billion in savings by Mr. Allen, Charter's plan would leave Mr. Allen with the biggest voting stake and keep the company's tax structure intact. This allows Mr. Allen to take advantage of $1 billion in net operating losses. However, JPMorgan and other senior Charter lenders, according to the New York Post, object to the restructuring, saying it amounts to a change of control since the bondholders would wind up owning the business in exchange for forgiving about half their loans. With a change in the ownership structure, Mr. Allen would be unable to take advantage of Charter's net operating losses, making him personally liable for more than $1 billion in taxes, a source said, according to the report. According to New York Post, several sources said Charter has not been willing to agree to such a concession since the equity and debt markets have rallied, and appears to have stopped negotiating altogether with Charter's senior lenders. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHINA HEALTH: June 30 Balance Sheet Upside-Down by $6 Million ------------------------------------------------------------- China Health Care Corp.'s balance sheet at June 30, 2009, showed total assets of $1.47 million and total liabilities of $7.06 million, resulting in a stockholders' deficit of about $5.59 million. For three months ended June 30, 2009, the Company reported a net income of $280,996 compared with a net loss of $93,152 for the same period in 2008. For nine months ended June 30, 2009, posted a net loss of $776,674 compared with a net loss of $2.09 million for the same period in 2008. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42b7 China Health Care Corp. provides consultancy services to the VIP Maternity & Gynecological Centers in the People's Republic of China. These services are provided in conjunction with Johns Hopkins International, LLC, a U.S. based healthcare provider, and based upon a Consultancy Agreement with JHI. The Company is currently under contracts to provide consultancy services to a total of five VIP Birthing Centers in the PRC and to manage a private hospital in Macau. Going Concern Doubt Samuel H. Wong & Co., LLP, in South San Francisco, California, raised substantial doubt about China Health's ability to continue as a going concern after auditing the Company's financial results for the years ended September 30, 2008, and 2007. The auditor noted that the Company continued to incur losses and working capital deficiencies. The Company has a negative cash flow from operations of $1,457,854 for the year ended September 30, 2008, and a working capital deficiency of $4,812,117. The Company continues to make efforts to procure outside financing to strengthen its financial position. CLARE HOUSE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Clare House, LLC PO Box 40444 Spokane, WA 99220 Case No.: 09-04650 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Clare House Bungalow Homes, LLC 09-04651 Chapter 11 Petition Date: August 20, 2009 Court: United States Bankruptcy Court Eastern District Of Washington (Spokane/Yakima) Judge: Patricia C. Williams Debtor's Counsel: Dan O'Rourke, Esq. Southwell & ORourke 421 W Riverside Avenue, Suite 960 Spokane, WA 99201 Tel: (509) 624-0159 Fax: (509) 624-9231 Email: dorourke@southwellorourke.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. COLLINS & AIKMAN: Moody's Affirms 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed Collins & Aikman Floorcovering, Inc.'s debt ratings, including its B2 Corporate Family and Probability of Default Ratings, and the B2 rating on its Senior, Secured Term Loan. The ratings outlook remains stable. CAF's B2 CFR and stable outlook are supported by its end market diversity, with a majority of revenue derived from the more stable institutional (education, government and healthcare) market, and its solid market position in these core market segments. When coupled with a flexible cost structure and recent declines in input costs, the company has maintained strong operating margins. Although credit metrics are weak, there is some cushion to absorb moderate declines in this environment. CAF's liquidity is expected to remain good, supported by significant balance sheet cash and the expectation for continued free cash flow generation over the near term. Ratings affirmed: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- Senior, Secured Term Loan B due 2014 at B2 (LGD4, 56%) -- The ratings outlook is stable The prior rating action on CAF occurred on April 16, 2007, when Moody's affirmed the company's B2 corporate family rating and changed the outlook to stable from negative. Collins & Aikman Floorcoverings, Inc., is a leading manufacturer of vinyl-backed floorcovering products, including six-foot roll carpet, modular carpet tile and high-style broadloom carpets. The company is a wholly-owned subsidiary of Tandus Group, Inc, whose capital stock is majority owned by funds managed by Oaktree Capital Management, LLC, through the OCM Principal Opportunities Fund II, L.P., and BancAmerica Capital Investors II, L.P. The company's revenues approached $340 million in the LTM period ending May 2, 2009. COLONIAL BANCGROUP: Bank Receivership Cues Default on Securities ---------------------------------------------------------------- The Colonial BancGroup, Inc., reports that the August 14, 2009, appointment of the Federal Deposit Insurance Corporation as receiver of Colonial Bank constitutes a triggering event, also termed an "Event of Default," under the Indentures governing the Company's: -- 8.875% Subordinated Notes Due 2038; -- Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2033; -- 7.875% Preferred Securities Colonial Bank, the principal operating subsidiary of Colonial BancGroup, was closed by the Alabama State Banking Department on August 14, and the FDIC was appointed as receiver of the Bank. Under Indentures, an Event of Default occurs if, among other things, a receiver is appointed for the Company or any substantial part of its property, including the Bank. Under the Subordinated Notes Indenture, upon an Event of Default, the principal amount of the Notes becomes immediately due and payable without any declaration or other action on the part of the Trustee or any holder of the Notes. Under the Debentures Indenture, upon an Event of Default, the principal amount of the Debentures, together with any interest accrued but unpaid, becomes due only after the trustee or holders of not less than 25% in aggregate principal amount of the Debentures then outstanding, by notice in writing to the Company (and to the trustee if given by the holders of the Debentures), declare such principle and accrued interest immediately due and payable. Under the Preferred Securities Indenture, upon an Event of Default, the principal amount of the Securities, together with any interest accrued but unpaid, becomes due only after the trustee or holders of not less than 25% in aggregate principal amount of the Securities then outstanding, by notice in writing to the Company (and to the trustee if given by the holders of the Securities), declare such principle and accrued interest immediately due and payable. As of August 14, 2009, the Company had roughly $250 million Subordinated Notes outstanding pursuant to an Indenture, dated as of March 1, 2008, with The Bank of New York Trust Company, N.A., a national banking association, as trustee. As of August 14, 2009, the Company had roughly $5.2 million Debentures Due 2033 outstanding pursuant to an Indenture, dated as of March 26, 2003, by and between the Company, as successor in interest to P.C.B. Bancorp, Inc., and U.S. Bank National Association, a national banking association, as trustee. As of August 14, 2009, the Company had roughly $101.3 million Preferred Securities outstanding pursuant to an Indenture, dated as of March 21, 2002, with The Bank of New York, a New York banking corporation, as trustee as supplemented by a Second Supplemental Indenture, dated as of September 16, 2003, by and between the Company and the Trustee. As indicated in the FDIC press release dated August 14, 2009, subsequent to the closure, Branch Banking & Trust Company, Winston-Salem, North Carolina (Branch Bank), assumed all of the deposits of the Bank, and purchased approximately $22 billion of the Bank's assets in a transaction facilitated by the FDIC. Beginning on August 15, 2009, the 346 branch offices of the Bank reopened as branches of Branch Bank. Customers who have questions about the matters, or who would like information about the closure of the Bank, may visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/colonial-al.html or call the FDIC toll-free at 1.800.405.8739. The Company's principal asset is the capital stock that it owns in the Bank, and, as a result of the closure of the Bank, the Company has minimal remaining tangible assets. As the owner of all of the capital stock of the Bank, the Company would be entitled to the net recoveries, if any, following the liquidation or sale of the Bank or its assets by the FDIC. However, at this time, the Company does not believe that any recovery will be realized. On August 17, 2009, the New York Stock Exchange announced that it had determined that the Company's common stock (ticker symbol CNB) should be suspended immediately. In connection with its removal of the Company's common stock, NYSE also announced the immediate suspension of the Colonial Capital Trust IV 7.875% Trust Preferred Securities (ticker symbol CNB.PRB) and The Colonial BancGroup, Inc. 8 7/8% Subordinated Notes due March 2038 (ticker symbol CSB). NYSE determined that the Company's securities are no longer suitable for listing on NYSE due to the closure of the Bank, the Company's principal operating subsidiary. The Company does not intend to appeal the suspension or delisting decision and will file a Form 25-NSE with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration from NYSE. The Company also reports that on August 18, David B. Byrne, Jr. resigned as Executive Vice President, General Counsel, and Secretary of the Company. The Company said that as a result of the events, on August 17, 2009, the Company made the decision to cancel its Special Meeting of Shareholders originally scheduled for 10:00 a.m., Central Daylight Time, on Wednesday, September 2, 2009. The Colonial BancGroup (NYSE: CNB) -- http://www.colonialbank.com/ -- operates 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. BancGroup posted a net loss of $606 million, or $3.02 per common share, in the quarter compared to a net loss of $168 million, or $0.86 per common share, in the 1st quarter of 2009. As a result of regulatory actions and the current uncertainties associated with Colonial's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial's ability to continue as a going concern. As reported by the TCR on August 4, Fitch Ratings downgraded the ratings of The Colonial BancGroup's Long-term Issuer Default Rating (IDR) to 'C' from 'CCC' and Colonial Bank's long-term IDR to 'C' from 'B-'. Moody's Investors Service downgraded the issuer ratings of Colonial BancGroup to 'C' from 'Caa1'. The rating actions follow the announcement that the pending $300 million investment by Taylor Bean & Whitaker and its consortium of investors has terminated. BancGroup was mandated to raise $300 million in equity from the private sector in order to receive the much needed $550 million of capital through the Treasury's Capital Purchase Program, for which it already received preliminary approval. COLONIAL BANCGROUP: Colonial Bank Failure Hits Client Taylor Bean ----------------------------------------------------------------- Taylor, Bean & Whitaker Mortgage Corp., filed for Chapter 11 after it was suspended from making loans by the U.S. The Company believes it was ordered to stop lending because of the failure of its primary bank, Colonial Bank. "The Company believes that these events are related to various investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean's primary bank. On or about August 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf -- such as homeowner's insurance premiums and real estate taxes," Taylor Bean said in an August 24 statement announcing its bankruptcy filing. Taylor Bean and other investors had announced in April 2009 the signing of a definitive agreement with Colonial BancGroup for a $300 million equity investment in Colonial. Taylor Bean said it is currently in discussions with the FDIC, the receiver for Colonial, in hopes that this circumstance can be remedied immediately and so that individual borrowers are not affected further by Taylor Bean's inability to access its Colonial bank accounts. Taylor Bean is a 27-year-old company that grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. FDIC Probe & Going Concern Doubt As reported by the Troubled Company Reporter on August 12, 2009, Colonial BancGroup was informed by the U.S. Department of Justice on August 6, 2009, that it is the target of a federal criminal investigation relating to the Company's mortgage warehouse lending division and related alleged accounting irregularities. BancGroup's management and board of directors are assessing the impact of the events on the Company's financial position and results of operations, and as a result, BancGroup has been unable to file its Quarterly Report on Form 10-Q for the period ended June 30, 2009 within the prescribed time period. BancGroup believes that the consolidated statements of income will reflect a net loss for the three and six months ended June 30, 2009 and as a result of uncertainties associated with BancGroup's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about its ability to continue as a going concern. The net loss is due primarily to increased credit costs and noncash charges related to a deferred tax asset valuation allowance and goodwill impairment. About Colonial BancGroup Colonial BancGroup (NYSE: CNB) is a financial services company that provides diversified services, including retail and commercial banking, wealth management services, mortgage banking and insurance products. The BancGroup derives substantially all of its income from Colonial Bank, N.A (Colonial Bank) its banking subsidiary. Colonial bank -- http://www.colonialbank.com/-- operates 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank, Montgomery, AL, was closed by the Alabama State Banking Department. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking and Trust, Winston-Salem, North Carolina, to assume all of the deposits of Colonial Bank. As reported by the TCR on August 20, Moody's Investors Service withdrew all ratings of Colonial BancGroup (previously 'C' issuer rating), and its subsidiaries, including its lead bank, Colonial Bank. The withdrawal follows the closing of Colonial Bank. COLONIAL BANCGROUP: DBRS Downgrades All Ratings to D ---------------------------------------------------- DBRS has downgraded all ratings of Colonial BancGroup, Inc. (Colonial or the Company), and its related entities to D and subsequently withdrew the ratings. Moreover, DBRS has removed the Under Review with Negative implications on all ratings. The rating actions follow Colonial's notification through an 8-K, of the triggering of an "Event of Default" for its 8.875% Subordinated Notes due 2038, its Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2033, and its 7.785% Preferred Securities. Upon the "Event of Default", all principal, including any interest accrued but unpaid (specific to the Junior Sub. Debt and Preferred Securities) becomes due. DBRS anticipates that the trustee or holders with more that 25% in aggregate principal amount of the Floating Rate Junior Subordinated Debentures, and the Preferred Securities will request payment in full. DBRS believes that Colonial's ability to satisfy these obligations is severely limited. Colonial BancGroup (NYSE: CNB) -- http://www.colonialbank.com/-- operates 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. BancGroup posted a net loss of $606 million, or $3.02 per common share, in the quarter compared to a net loss of $168 million, or $0.86 per common share, in the 1st quarter of 2009. As a result of regulatory actions and the current uncertainties associated with Colonial's ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial's ability to continue as a going concern. As reported by the TCR on August 4, Fitch Ratings downgraded the ratings of The Colonial BancGroup's Long-term Issuer Default Rating (IDR) to 'C' from 'CCC' and Colonial Bank's long-term IDR to 'C' from 'B-'. Moody's Investors Service downgraded the issuer ratings of Colonial BancGroup to 'C' from 'Caa1'. The rating actions follow the announcement that the pending $300 million investment by Taylor Bean & Whitaker and its consortium of investors has terminated. BancGroup was mandated to raise $300 million in equity from the private sector in order to receive the much needed $550 million of capital through the Treasury's Capital Purchase Program, for which it already received preliminary approval. COLONIAL BANK: S&P Withdraws 'CCC-' Rating on Various Bonds ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its rating on one bond issue supported by a Colonial Bank letter of credit and affirmed its rating on one bond issue supported by a Colonial Bank confirming LOC. The bond issue whose rating S&P are withdrawing is a fixed-rate bond issue with serial maturities for which Colonial Bank ('R') provides credit support in the form of an LOC. S&P are withdrawing S&P's rating to reflect the uncertainty surrounding Colonial Bank's ability to honor its obligation for the full and timely payment of interest and principal according to the transaction's terms while the bank is in receivership with the Federal Deposit Insurance Corp. The bond issue whose rating S&P are affirming is a revenue bond issue for which Colonial Bank provides a fronting LOC. S&P are affirming its rating to reflect a confirming LOC that Federal Home Loan Bank of Atlanta ('AAA/A-1+') provides. The confirming LOC provides for the full and timely payment of interest, principal, and purchase price upon a tender according to the transaction's terms in the event that Colonial Bank fails to honor its obligations. Rating Withdrawn Auburn Industrial Development Board US$4.48 million facilities revenue bonds series 1999 due 1/01/2020 Rating ------ CUSIP To From ----- -- ---- 050226AK5 NR CCC-/Watch Neg 050226AL3 NR CCC-/Watch Neg 050226AM1 NR CCC-/Watch Neg 050226AN9 NR CCC-/Watch Neg 050226AP4 NR CCC-/Watch Neg 050226AQ2 NR CCC-/Watch Neg 050226AW9 NR CCC-/Watch Neg Rating Affirmed Alabama Housing Finance Authority US$3.215 million series 2000C due 09/01/2030 CUSIP Rating ----- ------ 01030PDG8 AAA/A-1+ CRUCIBLE MATERIALS: Wants to Sell All Assets; 2 Units Have Buyer ---------------------------------------------------------------- Crucible Materials Corp wants to sell virtually all its assets at an auction, although it has reached a contract only with a buyer for its compact and research divisions. Crucible is asking approval from Judge Mary Walrath to set guidelines that would govern a proposed Sept. 21 auction. Under the proposed timetable, all bids to compete in the auction would have to be submitted by Sept. 17. Crucible says that the DIP lenders set an August 14 deadline to identify a stalking horse bidder for all of its assets and obtain entry of a sales procedures order. Crucible says that despite its best efforts, it has not been able to identify a stalking horse for, or negotiate an asset purchase agreement covering, substantially all of its assets. Crucible says that while negotiations with DIP lenders are ongoing, it is presently in a "technical state of default" under the loan agreement. The Debtors have decided to enter into an asset purchase agreement with Carpenter Technology Corp. for the sale of their compaction and research divisions, subject to any higher and better offers. Carpenter will pay $20 million, subject to adjustments, for the two divisions. The parties agree to closing not later than October 31. Carpenter will receive a $600,000 break-up fee plus reimbursement of expenses of up to $300,000 in the event another party emerges as the winning bidder for the two divisions. The Debtors have not received any firm offers for the remaining assets, which they intend to auction off at the same time as the compaction and research divisions. Crucible says it does not intend to conduct a fire sale for the remaining assets. Instead, it simply wishes for an orderly process pursuant to which, if acceptable bids are received for all or some substantial portion of the remaining assets, the bids can be considered at an expedited time frame. Based in Syracuse, New York, Crucible Materials Corporation -- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube -- makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company is currently employee-owned. Its Web site is http://www.crucible.com/ The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. CRUCIBLE MATERIALS: Plan Exclusivity Extended Until Dec. 2 ---------------------------------------------------------- The Bankruptcy Court approved Crucible Materials Corp.'s request for an extension until December 2, 2009, its exclusive period to file a Chapter 11 plan. The Court also extended the corresponding period to solicit acceptances of the Chapter 11 plan until Jan. 31, 2010. The proposal did not meet any objections. Based in Syracuse, New York, Crucible Materials Corporation -- http://www.crucible.com/-- aka Crucible Specialty Metals, Crucible Service Centers, Crucible Compaction Metals, Crucible Research and Trent Tube makes stainless and alloy steel for use in the aircraft, automotive, petrochemical, and other industries. The Company sold its trent tubes unit to Plymouth Tube in 2007. Crucible is currently employee-owned. The Company and its affiliate, Crucible Development Corporation, filed for Chapter 11 protection on May 6, 2009 (Bankr. D. Del. Lead Case No. 09-11582). Mark Minuti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. The Debtors engaged Duff & Phelps Securities LLP as investment banker; RAS Management Advisors LLC as business advisor; and Epiq Bankruptcy Solutions LLC as claims agent. Roberta A. DeAngelis, United States Trustee for Region 3, appointed five creditors to serve on the Official Committee of Unsecured Creditors. The Debtors listed assets and debts both ranging from $100 million to $500 million. CRUSADER ENERGY: Wants Plan Filing Deadline Extended ---------------------------------------------------- Crusader Energy Group Inc. and its units ask the U.S. Bankruptcy Court for the Northern District of Texas to extend their exclusive periods to file a Chapter 11 plan until September 8, 2009, and the solicitation period for that Plan until November 13, 2009. The Debtors propose that the deadlines be further extended subject to an evergreen provision -- upon consent of the first lien lenders, second lien lenders and Committee, each exclusive period may be extended through and including an additional 45 days. With the assistance of their professionals, the Debtors have expended considerable efforts exploring various sale and restructuring alternatives, and are in the process of evaluating a number of those alternatives. "This process is ongoing and continues to evolve, change and take shape," says Beth Lloyd, Esq., at Vinson & Elkins LLP. According to Ms. Lloyd, the Debtors have been working with their first lien lenders, second lien lenders and Committee with respect to the sale and restructuring alternatives and those constituents have been involved in the process. Although the Debtors expect to finalize a course of action shortly, they simply need more time, she says. Further, in order to propose a thoughtful and feasible plan, the Debtors need additional time to evaluate the proofs of claim that have been timely filed, as well as their material contracts and unexpired leases. About Crusader Energy Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. -- http://www.ir.crusaderenergy.com/-- explores, develops and acquires oil and gas properties, primarily in the Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth Basin in the United States. It has working interests in more than 1,000 wells. Crusader Energy and its affiliates filed for Chapter 11 protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31797). The Debtors' financial condition as of September 30, 2008, showed total assets of $749,978,331 and total debts of $325,839,980. Beth Lloyd, Esq., Richard H. London, Esq., and William Louis Wallander, Esq., at Vinson & Elkins, L.L.P., represent the Debtors as counsel. Holland N. Oneil, Esq., Michael S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne & Sewell, represent the official committee of unsecured creditors as counsel. CT INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: CT Industries, Inc. 31811 Industrial Park Drive Pinehurst, TX 77362 Bankruptcy Case No.: 09-36087 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- Esperanza Palms, LLC 09-36089 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Julie Mitchell Koenig, Esq. Tow and Koenig PLLC 26219 Oak Ridge Drive The Woodlands, TX 77380 Tel: (281) 681-9100 Fax: (281) 681-1441 Email: jkoenig@towkoenig.com Total Assets: $2,687,717 Total Debts: $2,868,990 A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/txsb09-36087.pdf The petition was signed by Jesus A. Tavarez, CEO of the Company. CUNNINGHAM BROADCASTING: Payment of $33.5MM Loan Moved to Oct. 30 ----------------------------------------------------------------- Cunningham Broadcasting Corporation obtained from their secured lenders an extension to October 30, 2009, on the repayment of a $33.5 million term loan facility which cross-defaults to Sinclair Broadcast Group, Inc.'s secured credit facility. This was revealed by David Smith, President and CEO of Sinclair, when Sinclair released its second quarter financials. "We were notified by Cunningham Broadcasting Corporation, our LMA partner in six markets, that their secured lenders granted them an extension to October 30, 2009 on the repayment of a $33.5 million term loan facility which cross defaults to our secured credit facility," Mr. Smith said. "Cunningham and its lenders continue to seek a resolution to satisfy the debt maturity. This resolution may have a financial impact on Sinclair." Cunningham holds a $33.5 million term loan facility originally entered into on March 20, 2002. Interest is paid quarterly at a rate of LIBOR plus 1.5%. Primarily all of Cunningham's assets are collateral for its term loan facility, which is non-recourse to Sinclair. Cunningham's term loan facility was declared in default as of June 5, 2009, for failure to timely deliver certain annual financial statements. Effective as of June 5, a default interest rate of LIBOR plus 3.5% has been instituted on all outstanding borrowings under the facility. On June 30, the default was waived and the termination date of the Cunningham term loan facility was extended from June 30 to July 31, subject to certain conditions, including maintaining the default interest rate. The October 30 extension requires that Cunningham make $200,000 principal payments on its term loan facility as of the first day of each of August, September and October with the balance due on October 30. Sinclair's Bank Credit Agreement contains certain cross-default provisions with respect to Cunningham as a "Material Third Party Licensee," as defined in the Bank Credit Agreement, pursuant to which a default would be caused by the institution of insolvency or similar proceedings, either voluntary or involuntary, with respect to Cunningham, resulting in potential acceleration under Sinclair's Bank Credit Agreement. Sinclair noted in its quarterly report that in a bankruptcy proceeding, Cunningham could seek to reject the parties' six LMAs, which would cause a decrease in Sinclair's revenue and operating results. During the years ended December 31, 2008, 2007, and 2006, Sinclair made payments of $8.0 million, $7.8 million and $11.3 million, respectively, to Cunningham under the LMA agreements. Sinclair made payments to Cunningham under LMA agreements of $1.7 million and $1.2 million for the three months ended March 31, 2009, and 2008, respectively. Cunningham is the owner-operator and FCC licensee of WNUV-TV, Baltimore, Maryland; WRGT-TV, Dayton, Ohio; WVAH-TV, Charleston, West Virginia; WTAT-TV, Charleston, South Carolina; WMYA-TV (formerly WBSC-TV), Anderson, South Carolina; and WTTE-TV, DAYTON SUPERIOR: To Send Plan Ballots in September -------------------------------------------------- Dayton Superior Corporation said the United States Bankruptcy Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware in Wilmington has signed an order approving the Company's disclosure statement. The order affirms that the document contains adequate information for creditors to evaluate the proposed plan of reorganization, which was filed with the Court on July 23, 2009. Dayton Superior filed a voluntary petition for reorganization under chapter 11 of the U.S. Bankruptcy Code on April 19, 2009. The Company said it expects to mail creditors the disclosure statement, plan of reorganization, and ballots to vote on the plan during the first week of September 2009, with a deadline of October 1, 2009, for casting ballots. The Court set October 14, 2009, as the date for the confirmation hearing on the plan of reorganization. "We are pleased that the Court has approved the disclosure statement," said Rick Zimmerman, Dayton Superior's President and Chief Executive Officer. "This will enable us to proceed with the vote on the proposed plan of reorganization, which we believe has the support of an overwhelming majority of creditors. We believe we are on track to emerge from Court protection by the end of October." Under the proposed plan of reorganization, prepetition senior subordinated notes would be converted to equity in the new Dayton Superior and qualified noteholders would have the right to purchase additional shares of stock through a $100 million rights offering. Two of the largest prepetition note holders, Oaktree Capital Management, L.P. and Solus Alternative Asset Management LP, have agreed to backstop any unsubscribed portion of the rights offering. They would own a substantial majority of the stock of the reorganized Company, which would be privately held. "This exit plan is available to us because of the commitment of Oaktree and Solus to backstop the rights offering, which is a strong statement about the future of the Company," said Mr. Zimmerman. "Upon confirmation of the plan, we will emerge with exit financing in place, substantially less debt, and a sustainable, conservative capital structure. We will have the resources to grow the business and pursue attractive investment opportunities that may come along. We also have taken advantage of the reorganization process to re-examine and consolidate our physical infrastructure to become stronger, leaner, and more efficient." Dalton Superior has noted that while the Company is in chapter 11, investments in its securities will be highly speculative. Investors should assume that shares of the Company's common stock have no value. Under the proposed plan of reorganization, existing shares of the Company's common stock would be cancelled upon consummation of the Company's reorganization with no consideration being paid for such shares. The outcome of the chapter 11 restructuring case is uncertain and subject to substantial risk. There can be no assurance that the Company will be successful in achieving its financial reorganization. Headquartered in Dayton, Ohio, Dayton Superior Corporation (Pink Sheets: DSUPQ) -- http://www.daytonsuperior.com/-- makes and distributes construction products. Aztec Concrete Accessories Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa Inc., Southern Construction Products Inc., Symons Corporation and Trevecca Holdings Inc. were merged with the Company December 31, 2004. The Company filed for Chapter 11 protection on April 19, 2009 (Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M. Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP serve as the Debtors' bankruptcy counsel. Russell C. Silberglied, Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as Delaware counsel. Dayton Superior had $288,709,000 in assets and $405,867,000 in debts as of February 27, 2009. DEIDRA NEWTON: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Deidra E. Newton aka Deidre E. Newton aka Community Real Inc 736 Sunset Road West Palm Beach, FL 33401 Bankruptcy Case No.: 09-27466 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Norman L. Schroeder II, Esq. 6801 Lake Worth Rd #120 Lake Worth, FL 33467 Tel: (561) 642-8884 Fax: (561) 642-3377 Email: nschroeder@nlsbankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb09-27466.pdf The petition was signed by Ms. Newton. DEVELOPERS DIVERSIFIED: S&P Cuts Rating on Unsecured Debt to 'BB' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Developers Diversified Realty Corp.'s unsecured debt to 'BB' from 'BB+'. At the same time, S&P revised its recovery rating to '3' from '2', indicating S&P's expectation of a lower, but still meaningful, recovery (50%-70%) in the event of a payment default. In addition, S&P affirmed its 'BB' corporate credit rating on DDR and S&P's 'B' rating on the company's preferred stock. S&P's outlook on DDR remains negative. The '3' recovery rating affects $1.8 billion of rated senior unsecured notes currently outstanding and reflects S&P's practice of assigning recovery ratings to all debt with a speculative-grade rating. "The ratings and outlook reflect S&P's continued concern that DDR will face challenges with improving its currently constrained liquidity position and reducing its still-high leverage before its meaningful debt maturities in 2011 and 2012, when roughly 60% of the company's consolidated debt comes due, including its credit facility," said Standard & Poor's credit analyst Elizabeth Campbell. "Even following its recent equity and debt capital raises, the company remains highly reliant on asset sales and monetizations, including a potential TALF financing, to raise capital." S&P believe that commercial real estate transactions remain challenging, as the financial environment has driven real estate valuations lower and pushed financing costs higher. Additionally, in S&P's view, high retailer vacancies (including those DDR has absorbed to date, such as Mervyns and Circuit City) are likely to pressure operating income for the remainder of the year, which would strain DDR's already low debt coverage measures. DDR's high leverage (67% on a book value basis at June 30, 2009) and a heavily drawn credit facility limit its financial flexibility. Even following the company's actions thus far to bolster its balance sheet, DDR remains highly reliant on monetizations, equity issuance, and targeted asset sales to raise capital in advance of its significant debt maturities in 2011 and 2012, at a point in the real estate cycle when executing such transactions is challenging. DDR's higher refinancing costs and potential further compression of core cash flow from continued retailer stress will pressure the company's currently low debt coverage measures. S&P would lower the credit rating if bank covenant pressures increase, leverage or liquidity weakens, or if fixed-charge coverage dips below S&P's 1.5x minimum guideline for the rating. Although unlikely in the near term, S&P would consider revising the outlook to stable if covenant pressures abate, liquidity and leverage improve such that DDR's line usage declines, and the company maintains fixed-charge coverage metrics comfortably above 1.5x. DOLLAR GENERAL: Moody's Hikes Outlook on 'B2' Rating to Positive ---------------------------------------------------------------- Moody's Investors Service changed Dollar General Corporation's rating outlook to positive from stable. All existing ratings, including the B2 Corporate Family Rating and SGL-1 Speculative Grade Liquidity Rating, were affirmed. The change in outlook to positive is prompted by Dollar General's announcement that intends to proceed with an initial public offering of common stock for which the proceeds will be used to repay existing debt. In addition, the positive outlook reflects Moody's expectation that Dollar General's earning will continue to improve leading to a strengthening of credit metrics. Dollar General also announced that it will pay its shareholders (including KKR) a $200 million dividend from its excess cash. Moody's views this action as having no rating impact as the company has healthy excess cash balances and is expected to generate significant free cash flow over the next twelve months. However, this dividend payment may signal the start of the financial sponsor owners monetizing on their financial returns. The potential for future sizable cash payments to the financial sponsors constrains Dollar General's current ratings. Dollar General's B2 Corporate Family Rating balances its modestly leveraged capital structure, Moody's expectation that the company will continue to perform solidly through the challenging economic environment, and its aggressive financial policies. Its credit metrics are in line with a high single B rating. The rating also reflects the company's dominant position in a segment of retail which Moody's believe is relatively resistant to economic cycles. The positive rating outlook reflects Moody's expectation that Dollar General's credit metrics will strengthen over the next twelve to eighteen months given the likely debt reduction from the proceeds of the announced initial public offering as well as from earnings growth. The size of the initial public offering is presently unknown. Depending on the size of the offering as well as the corresponding reduction in debt, the ratings and LGD point estimates on individual debt instruments may change. These ratings are affirmed: * Corporate Family Rating at B2; * Probability of Default Rating at B2; * $1.7 billion first-out term loan at Ba3 (LGD3, 32%); * $600 million first-loss term loan at B1 (LGD 4, 56%); * $1.175 billion senior unsecured notes at B3 (LGD5, 76%); * $656 million senior subordinated notes at Caa1 (LGD6, 93%); and * Speculative grade liquidity rating at SGL-1. The last rating action on Dollar General was on March 26, 2009, when its Corporate Family Rating was upgraded to B2 from B3. Dollar General Corporation, headquartered in Goodlettsville, Tennessee, operates over 8,400 extreme value general merchandise stores in 35 states. Revenues are nearly $11 billion. DOLLAR GENERAL: S&P Puts 'B+' Rating on CreditWatch Positive ------------------------------------------------------------ Standard & Poor's Ratings Services said it placed its ratings, including the 'B+' corporate credit rating, on Dollar General Corp. on CreditWatch with positive implications. The CreditWatch placement follows Dollar General's S-1 filing, under which it plans to sell $750 million in common stock. Dollar General plans to use a portion of the proceeds to repurchase a mix of its existing subordinated and senior unsecured notes, subject to a 35% equity clawback provision under these indentures. In addition to the common stock offering, Dollar General plans to pay a $200 million dividend to its equity sponsors with cash from operations. "If completed," said Standard & Poor's credit analyst Ana Lai, "we expect debt reduction along with improvement in cash flow to result in a meaningful decrease in debt leverage, with total debt to EBITDA declining toward the low-4x level from about 5x currently." "We expect Dollar General's positive operating momentum to continue in the second quarter of 2009 as the company continues to benefit from consumers' trading down as well as its own restructuring initiatives," added Ms. Lai. Same-store sales increased 13% and EBITDA increased to $290 million from $182 million in the first quarter ended May 1, 2009. DOUBLE EXPOSURE: Recession Led to Chapter 11 Bankruptcy ------------------------------------------------------- Julia Pal-Chaudhuri's Double Exposure Studio LLC has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, blaming it on recession, Daryl Lang at Photo District News reports. Double Exposure listed less than $50,000 in assets and $100,000 to $500,000 in debts, which include unpaid taxes, Photo District relates. Photo District states that Ms. Pal-Chaudhuri, aka Indrani, was named this year as an additional defendant in All Points Capital Corporation's lawsuit against photographer Markus Klinko in 2007. According to the report, All Points was seeking payment of hundreds of thousands of dollars in mortgage debts. Julia Pal-Chaudhuri is a New York-based celebrity photographer who owns Double Exposure Studio. She and Markus Klinko were formerly a romantic couple and remain business partners. The two have photographed A-listers like Will Smith and Beyonce and shot work for major clients including Nike and Vogue. The photographers are scheduled to star in an upcoming reality show on the Bravo network called "Double Exposure". DOW INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Dow Industries 2606 E. La Madre Way North Las Vegas, NV 89081 Bankruptcy Case No.: 09-25466 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: H Stan Johnson, Esq. CJD Law Group, LLC 6293 Dean Martin Drive, Suite G Las Vegas, NV 89118 Tel: (702) 220-7050 Fax: (702) 220-4577 Email: sjohnson@cjdnv.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nvb09-25466.pdf The petition was signed by Michael D. Decker, president of the Company. DRAIN DOCTORS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Drain Doctors, Inc. 1102 E. 139th Avenue Tampa, FL 33613 Bankruptcy Case No.: 09-18471 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Allan C. Watkins, Esq. Watkins Law Firm, PA 707 N Franklin Street, Suite 750 Tampa, FL 33602 Tel: (813) 226-2215 Email: watkinslaw@worldnet.att.net Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Ryan Pelky, president of the Company. DYNAMOTIVE ENERGY: Posts $3MM Net Loss in Six Months Ended June 30 ------------------------------------------------------------------ Dynamotive Energy Systems Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K for the three and six months ended June 30, 2009. For three months ended June 30, 2009, the Company posted a net loss of $1.53 million compared with a net loss of $2.90 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $3.22 million compared with a net loss of $4.34 million for the same period in 2008. The Company's balance sheet showed total assets of $36.06 million, total liabilities of $11.34 million and stockholders' equity of about $24.72 million. The Company also disclosed that the financial statements were prepared on the going concern basis, which presumes the Company will be able to realize its assets and discharge its liabilities in the normal course of operations for the foreseeable future. A full-text copy of the Company's financial statements for the periods ended June 30, 2009, is available for free at http://ResearchArchives.com/t/s?42e0 Dynamotive Energy Systems Corporation (OTC BB: DYMTF.OB) -- http://www.dynamotive.com/-- is an energy solutions provider headquartered in Vancouver, Canada, with subsidiaries based in the United States, United Kingdom and Argentina. Its carbon/greenhouse gas neutral fast pyrolysis technology uses medium temperatures and oxygen-less conditions to turn dry waste biomass and energy crops into BioOil(TM) for power and heat generation. BioOil(TM) can be further converted into vehicle fuels and chemicals. ELEMENT ALUMINUM: Auctions Substantially All Assets Today --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee authorized, Element Aluminum, LLC, and Hayes Tennessee Venture, LLC to sell substantially all of their assets at an auction at theoffices of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., 165 Madison Ave., Suite 2000, Memphis, Tennessee, today, Aug. 25, 2009, at 1:00 p.m., prevailing Central time. A hearing on the sale motion will be held on Aug. 26, 2009, at 9:30 a.m. (Central Time). The Debtors relate that the sale of their assets is necessary for sufficient cash flow to continue operations for any period of time. The Debtors add that the potential purchaser, ElementAL Holdings, LLC, is one of the Debtors' prepetition secured lenders. ElementAL will purchase the Debtors' assets for $2.30 million payable as cash payment of $1.43 million plus a credit bid in the amount of $870,000 in partial satisfaction of the Note. The Debtors also state that the assets are collateral for a prepetition secured loan from Buyer evidenced by the Second Amended and Restated Secured Master Note and Waiver dated May 29, 2009, with a balance owing of $2.38 million as of the petition date. In the event that the assets are sold to a party submitting a qualified bid other than the Stalking Horse, then the Stalking Horse will be entitled to a break-up fee of $230,000. About Element Aluminum, LLC Jackson, Tennessee-based Element Aluminum, LLC, operates an Aluminum Fabricator business. The Company and Hayes Tennessee Venture, LLC filed for Chapter 11 on July 31, 2009 (Bankr. W. D. Tenn. Case No. 09-13091 and 09-13098). Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., represents the Debtors in their restructuring efforts. In their petition, the Debtors listed assets and debts both ranging from $10,000,001 to $50,000,0 ENCORIUM GROUP: Posts $2MM Q2 Loss, May Dissolve by Q1 2010 ----------------------------------------------------------- Encorium Group, Inc., posted a net loss of $1.94 million for three months ended June 30, 2009, compared with a net loss of $1.44 million for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $2.13 million compared with a net loss of $3.45 million for the same period in 2008. The Company's balance sheet at June 30, 2009, showed total assets of $14.32 million, total liabilities of $12.53 million and stockholders' equity of $1.79 million. The Company said that there is substantial doubt about its ability to continue as a going concern. The Company related that its net cash used in operations for the six months ended June 30, 2009, was $4.70 million. Its cash and cash equivalents as of June 30, 2009, was $839,000. In the event the sale of its subsidiary, Encorium Oy, is not consummated, it anticipates that it will meet its cash requirements at least into the second quarter of 2010. In the event it is unable to do so, in order for the Company to continue as a going concern it will be required to obtain additional capital from external sources or significantly reduce its operating costs, which may include the cessation of operations in some countries or liquidation and dissolution of the Company. Any decision to liquidate the Company may occur at any point during or before the first quarter of 2010. The Company's ability to obtain additional financing in the future will depend in part upon prevailing capital market conditions, well as conditions in its business and its operating results. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42d1 Encorium Group, Inc. (NASDAQ:ENCO) is a clinical research organization, which is engaged in the design and management of clinical trials for the pharmaceutical, biotechnology and medical device industries. The Company's clients consist of companies in the pharmaceutical, biotechnology and medical device industries. The Company offers a range of clinical research and development services supporting Phase I through Phase IV clinical trials, such as strategic trial planning, project management, monitoring, data management and biostatistics, pharmacovigilance, medical writing, quality assurance, outsourcing of clinical staff and medical device certification in the European Union. The Company's services include study protocol design, clinical trials management, global data management services, biostatistics, medical and regulatory affairs, quality assurance and compliance and medical report writing. ESCADA AG: U.S. Unit to Honor Customer Programs ----------------------------------------------- Escada (USA) Inc. avers that the filing of its Chapter 11 Case may negatively affect customers' attitudes and behavior toward its businesses. The Debtor is concerned that its goodwill and ongoing business relationships may erode if its customers perceive that it is unable or unwilling to fulfill the prepetition promises it made through its customer programs and practices. The Debtor's Customer Programs include: -- Gift Certificates, -- Refund and Exchange Program, where customers are allowed to return or exchange merchandise of the Debtor that is in saleable condition within 10 days of purchase, -- Price Adjustment Policy, where the Debtor provides a price adjustment to customers if an item goes on sale within 10 days of purchase, and -- Wholesale Customer Programs. As of the July 31, 2009, the Debtor had approximately $520,917 in outstanding gift certificates and credits for customers. Over the past twelve months, on average, approximately $2,785,165 worth of merchandise purchased by customers from the Debtor was either returned or exchanged in the Debtor's stores. The Debtor does not anticipate the monthly average amount of returns or exchanges to deviate substantially as a result of its Chapter 11 case. Gerald C. Bender, Esq., at O'Melveny & Myers LLP, in New York, tells the Court that the Customer Programs generally cost little to the Debtor, but generate significant benefits by rewarding customer loyalty and otherwise promoting sales. Accordingly, the Debtor sought and obtained the Court's authority, on an interim basis, to perform and honor its prepetition obligations related to the Customer Programs. The Court will convene a final hearing on September 9, 2009. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: U.S. Unit to Pay Debt to Common Carriers --------------------------------------------------- Escada (USA) Inc. maintains that its business operations and the success of its reorganization depend on the maintenance of reliable and efficient transportation and distribution systems for retail merchandise. The Debtor has identified a core group of common carriers that consists of carriers, shippers, freight forwarders and truckers. They include Deutsche Lufthansa AG, Schaeffer Trans, Inc., United Parcel Service of America, Inc., FedEx Corporation, Savino Del Bene USA Inc. and Agility Logistics GMGH. The Debtor has determined that each of the Common Carriers is absolutely necessary to the continued shipping, delivery and return of goods used or sold in the ordinary course of its business. Fashion Logistics, Inc., is the domestic warehouse and distribution center through which all Retail Merchandise travels between delivery from the Debtor's parent and distribution to the retail stores in which it is sold. The Debtor has determined that the services of Fashion Logistics or the Distribution Manager are absolutely necessary to the continued shipping and sales of the Retail Merchandise, and without its services the Debtors will be unable to timely ship goods or process sales of Retail Merchandise. The Debtor estimates that Retail Merchandise valued at approximately $12,100,000 is currently being held in the Distribution Manager's warehouse in New Jersey or currently being shipped by any of the Common Carriers for returns processing and order fulfillment. The total estimated amount owed to all Common Carriers and the Distribution Manager and the maximum amount required to obtain or deliver the Retail Merchandise is approximately $190,000. The Debtor tells the Court it intends to negotiate with the Common Carriers and the Distribution Manager to obtain continued services with less than full payment. To avoid disruptions in its operations, the Debtor sought and obtained the Court's authority, on an interim basis, to pay all valid prepetition claims of the Common Carriers and the Distribution Manager in an amount not to exceed $190,000. The Court will convene a final hearing on September 9, 2009. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: U.S. Unit to Pay Prepetition Employee Wages ------------------------------------------------------ In connection with its operations, Escada (USA) Inc. currently employs 239 employees, of which 221 are full-time employees and 18 are part-time employees. To minimize the personal hardship that employees would suffer if they are not paid when due and to maintain the morale of its essential workforce, the Debtor sought and obtained authority from the Court, on an interim basis, to continue to honor existing prepetition practices, programs and policies with respect to its employees. The Employee Obligations include wages, salaries, reimbursement obligations for business expenses, federal and state withholding taxes and other amounts withheld, employee health benefits, insurance benefits, paid time off, short- and long-term disability coverage and all other employee benefits that the Debtor has historically provided prepetition. The Debtor's average monthly gross payroll for all Employees is approximately $1,476,000. Reimbursements obligations are for business expenses like travel costs and equipment costs. Garnishments that the Debtor withholds in the ordinary course of payroll processing include tax levies, child support and other Court-ordered garnishments. The Debtor withholds, on average, $1,250 per pay period on account of the Garnishments. The various benefit plans and policies the Debtor maintain for its Employees can be divided into: (1) medical insurance, dental insurance, vision care, life and accidental death and dismemberment insurance, long- and short-term disability insurance, supplemental short term disability, dependent care spending accounts, health care reimbursement accounts, the "health advocate" program and group travel/accident insurance; (2) paid time off plans, including vacation days, personal days, sick days and bereavement leave; (3) a 401(k) plan; (4) an educational assistance program; (5) a clothing allowance program; (6) a car allowance program; (7) an employee assistance program; and (8) a severance plan. The Debtor believes that its annual expenditures under the Employee Benefit Plans aggregate to approximately $5 million. The Debtor also believes it is necessary to continue payment of administrative fees to the various administrators that administer the Debtor's Employee Obligations and related Employee Benefit Plans. Without the continued services of these administrators, including Paychex, UnitedHealthCare, Lincoln, Cigna, Prudential and AHAC, the Debtor says it will be unable to continue to honor its Employee Obligations and related Employee Benefit Plans in an efficient and cost-effective manner. As of the Petition Date, the Debtor estimates to owe these Prepetition Employee Obligations: Employee Compensation $337,071 Reimbursement Obligations $60,000 Garnishments - Employee Benefit Plans $280,000 Payroll Tax Obligations de minimis The Debtor, Judge Bernstein ruled, is permitted to make all payments with respect to the Prepetition Employee Obligations, provided that the compensation paid to each Employee does not exceed the $10,950 cap under Section 507(a)(4) of the Bankruptcy Code. The Debtor may not pay prepetition Reimbursement Obligations in excess of $1,000 per employee prior to the Final Hearing, the Court ruled, Judge Bernstein ordered. The Court also held that (i) no prepetition amounts attributable to the Car Allowance Program or Clothing Allowance Program will be paid prior to the Final Hearing, and (ii) no severance obligation may be paid by the Debtor prior to the Final Hearing. JPMorgan Chase and any other bank authorized to administer the Debtor's bank accounts under its Cash Management System Motion are permitted to receive, process, honor and pay any and all other transfers that are related to the Prepetition Employee Obligations. The Debtor is allowed to issue postpetition checks or to effect postpetition funds transfer requests in replacement of any checks or funds transfer requests related to Employee Obligations dishonored or rejected as a consequence of the commencement of the Debtor's Chapter 11 case. The Court will convene a final hearing on the Debtor's request on September 9, 2009. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESCADA AG: Various Parties Interested in Assets, Brand Name ----------------------------------------------------------- Several parties might be interested in acquiring the assets and brand name of Germany-based fashion house Escada AG while in insolvency proceedings, German newspaper Handelsblatt reported without divulging its source. Among those interested may be LVMH Moe Hennessy Louis Vuitton SA and PPR SA, Handelsblatt related. Bloomberg News noted in a separate report that a group of investors, which include Nickolaus Becker, former chairman of EM.TV AG, has made known its interest in Escada AG's brand, licensing rights and inventory through a letter to the Company. Escada AG filed an insolvency petition with the Municipal Court of Munich on August 13, 2009, in light of sharp declines in sales, weak demand for luxury goods and unsuccessful restructuring efforts. The goal of the petition was to effect a restructuring of the ESCADA Group business either through an insolvency plan under German insolvency law or by a structured sales process of Escada AG's assets. As part of its restructuring efforts before August 13, Escada AG made a senior notes offering to increase liquidity. The Offer was conditioned on the receipt of gross proceeds of at least EUR29 million or US$41.1 million. The Company, however, failed to obtain the minimum tender condition of at least 80% of the aggregate principal amount of the Senior Notes by the August 11, 2009 expiration date of the Offer. The Munich Court appointed Christian Gerloff, LL.D., as preliminary insolvency administrator on the same day. Mr. Gerloff has taken up his tasks and has held first meetings with the Company's Board of Management. "My first impression is that Escada AG is very well prepared for insolvency proceedings," Mr. Gerloff noted in a public statement. "From [this filing's] perspective these careful preparations would suggest that there are chances to maintain the going concern." Escada AG's largest investors are Russian millionaire Rustam Aksenenko, who owns 20.9 percent of the stock, as well as German billionaires Wolfgang and Michael Herz, who hold 12.45 percent each, Bloomberg News noted in a separate report. Escada AG acts as the operating head of the ESCADA Group and has its registered offices in Aschheim near Munich, Germany. Founded in 1976 by Margaretha and Wolfgang Ley, the ESCADA Group is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. Since July 2009, Bruce Salzer took over as chief executive officer of the ESCADA Group. The ESCADA Group maintains distribution companies in some of its key markets in France, Hong Kong, Japan, Spain and the United States. To avoid disruption in its U.S. operations, Escada (USA) Inc. filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on August 14, 2009. Judge Stuart M. Bernstein handles the case. Escada USA's latest balance sheet noted US$61 million in assets and US$86 million in liabilities, which does not include debts of EUR200 million in senior notes owed by Escada AG and EUR13 million owed by Escada AG to Bayerische Hypo-und Vereinsbank-led lenders. As of August 13, 2009, the ESCADA Group operated 175 owned stores, 163 franchise stores and 20 owned outlet stories. As of June 30, 2009, Escada AG had 2,084 employees. The ESCADA Group reported consolidated assets of EUR322.2 million and consolidated liabilities of about EUR338 million as of April 30, 2009. The ESCADA Group has listed net losses since 2007. It reported a net loss of about US$130 million in the six months ended April 30, 2009, approximately US$99.5 million for the fiscal year ended October 2008, and approximately US$38.2 million in the fiscal year ended October 2007. The losses have been partly due to decline in sales and weak demand for Escada goods. CEO, Board Members Dispose Shares Escada AG said Chief Executive Officer Bruno Saelzer sold shares after the company filed for insolvency, Holger Elfes at Bloomberg News reported, citing Escada's statements on the OTS newswire. Mr. Saelzer, who joined Escada last year, sold 48,000 shares Aug. 17 for 75 cents (US$1.07) each and 77,882 share August 18 for 82 cents each. Jessica Saelzer, the CEO's wife, sold 142,000 shares August 18 for 81 cents apiece and another 18,000 for 77 cents a piece. Board member Werner Lackas sold 100,960 shares for 87 cents each August 18, according to a separate statement. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009 the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. A copy of Escada US's Chapter 11 petition and list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/sdny09-15008.pdf ESSAR STEEL: Moody's Reviews 'Caa1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service placed the ratings (Caa1 corporate family rating) of Essar Steel Algoma Inc. under review for possible downgrade. The company has had back-to-back quarters where EBITDA was negative, sales in the quarter ended June 30, 2009 fell 67% compared to a year ago, and demand among its end markets is expected to continue to be weak, making compliance with the existing financial covenants in its credit agreements highly unlikely in the September quarter. The company intends to seek a waiver or amendment of the financial covenants from its lenders. However, even if it is successful in obtaining a waiver or amendment, Algoma's leverage will remain especially high given the depressed state of the North American steel industry, and debt restructuring is possible in Moody's opinion. During the course of Moody's review, Moody's will monitor the company's progress in obtaining a covenant waiver or amendment and also try to ascertain the potential for a capital contribution or other form of support from its parent, Essar Global. These ratings were placed under review for possible downgrade: * Caa1 corporate family rating * Caa1 probability of default rating * B3 for its senior secured term loan facility due 2013 * Caa2 for its 9.875% senior unsecured notes due 2015 Moody's previous rating action for Algoma was on March 24, 2009, when the company's corporate family rating was lowered to Caa1, its outlook was changed to negative, and its speculative grade liquidity rating was lowered to SGL-4. Essar Steel Algoma Inc. is an integrated steel producer headquartered in Sault Suite Marie, Ontario. Approximately 80% of Algoma's sales are sheet products, with plate products accounting for the balance. Algoma's principal end markets are steel service centers, the automotive industry, steel fabricators and manufacturers. FIRST UNITED: Doesn't Expect Chapter 11 as Margins Improve ---------------------------------------------------------- First United Ethanol, LLC, said in a filing with the U.S. Securities and Exchange Commission on August 24 that it doesn't anticipate filing for bankruptcy, but instead is realizing positive crush margins that continue to improve its cash flow and liquidity. First United had said in its Form 10-Q filing with the SEC on August 14, "We have been involved in discussions with our primary lender, WestLB, regarding certain past and potential future non- compliance with our financial loan covenants that have resulted from the current conditions in the ethanol industry and our financial condition. Under the terms of our senior credit agreement with WestLB, we are required to repay the amount that our working capital loans outstanding exceed our borrowing base. Our borrowing base is 80% of the value of certain accounts receivable and certain inventory owned by the Company and calculated on a monthly basis. As of June 30, 2009 our working capital loans exceeded our borrowing base by $6,815,720 and we were not able to repay that amount to WestLB. Accordingly, we requested a waiver for the covenant contained in the credit agreement requiring us to repay the difference between our working capital loans outstanding and our borrowing base. WestLB granted us a waiver of this covenant through July 31, 2009. In addition, WestLB granted us a waiver of this covenant through September 30, 2009, so long as our working capital loans do not exceed our borrowing base by more than $6,490,000. As of July 31, 2009, our working capital loans exceeded our borrowing base by approximately $4,418,000. WestLB has indicated its willingness to work with us on a month to month basis to determine whether a waiver of this covenant will be granted for another one month period; however, at any time WestLB could decide not to grant this waiver and we would be in default on our senior credit agreement. If we violate the terms of our loan or fail to obtain a waiver of any such term or covenant, our primary lender could deem us in default of our loans and require us to immediately repay a significant portion or possibly the entire outstanding balance of our loans. If we do not have the funds available to repay the loans or we cannot find another source of financing, we may have to liquidate or reorganize under Chapter 11 bankruptcy protection. As a result, this raises substantial doubt about our ability to continue as a going concern." According to First United in its August 24 filing, the 10Q discussed covers financial information as of June 30, 2009, and does not reflect the past two months of operations. "In an effort to fully comply with SEC reporting requirements, we disclose all possible contingencies in our quarterly filings including bankruptcy. However, as we state in the report, we do expect to be able to satisfy our cash requirements for the next 12 months using only our revolving line of credit, senior credit facility, and earnings from operations. We had positive crush margins during the last part of June 2009 going forward. August's crush margins have grown stronger in response to our ability to purchase local corn. We are optimistic that favorable margins will continue as we complete our fourth fiscal quarter and move into the corn harvest season as local corn producers have already begun delivering their 2009 corn crop to our facility," First United stated. First United said that First United is producing at 100% capacity and expects to maintain production as supported through its current cash flow. The Company fully expects to pay its principal and interest payments to WestLB on September 30 as scheduled. Jimmy Anderson -- a director in the Energy Group of West LB, lead bank for the syndicate which holds SWGE's senior credit agreement and line of credit, said, "Many of the references in the articles were based on risk factors that exist in the ethanol industry and events that COULD happen. Outlining these risk factors in a company's 10Q filing does NOT imply that this situation will occur or is occurring. While the ethanol industry as a whole struggled earlier in the year, many ethanol plants including SWGE are currently realizing improved margins. Based on information from the company, WestLB anticipates that SWGE will make the September 30, 2009 debt service payment. We also recognize that a key component to SWGE's continued success is their ability to run at 100% capacity using corn purchased from local farmers." First United Ethanol, LLC -- http://www.firstunitedethanol.com/-- or FUEL is a progressive company with deep roots in South Georgia. GANNETT CO: Moody's Confirms Corporate Family Rating at 'Ba1' ------------------------------------------------------------- Moody's Investors Service confirmed Gannett Co., Inc.'s Ba1 Corporate Family Rating Ba1 Probability of Default Rating, and Ba2 un-guaranteed senior unsecured notes rating. In addition, Moody's assigned Baa3 ratings to Gannett's senior unsecured guaranteed bank facilities and to its guaranteed senior unsecured exchange notes due 2015 and 2016. The company's speculative grade liquidity rating was upgraded to SGL-3 from SGL-4 and the rating outlook is negative. The rating actions conclude the review for possible downgrade initiated on April 20, 2009. The rating confirmations reflect Gannett's continued meaningful free cash flow generation. Gannett's local media properties are vulnerable to media fragmentation, but its scale within its markets, diversity of assets that includes some meaningful digital properties, good cost control, and ability to leverage the infrastructure of multiple media properties within local geographic regions nevertheless distinguish it from smaller local media operators. Moody's believes Gannett will continue to capitalize on these strengths to generate free cash flow in excess of 8% of debt and maintain a modest cushion under its 3.5x senior debt-to-EBITDA covenant over the next several years notwithstanding continued downward pressure on newspaper revenue. The rating confirmation also reflects Moody's expectation that Gannett will continue to pay down debt from free cash flow and continue in the near term the process started with the May 2009 exchange offer to proactively reduce the refinancing risk associated with $3.3 billion of bonds and loans that mature in 2011 and 2012 through term-out refinancings. Confirmations: Issuer: Gannett Co., Inc. -- Corporate Family Rating, Confirmed at Ba1 -- Probability of Default Rating, Confirmed at Ba1 -- Issuer Rating, Confirmed at Ba2 -- Multiple Seniority Shelf/Senior Unsecured Shelf, Confirmed at (P)Ba2 -- Guaranteed Senior Unsecured Bonds due 2011 and 2012, Confirmed at Ba2, LGD5 - 87% from LGD5 - 85% Upgrades: Issuer: Gannett Co., Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Assignments: Issuer: Gannett Co., Inc. -- Guaranteed Senior Unsecured Bank Credit Facility, Assigned Baa3, LGD3 - 36% -- Guaranteed Senior Unsecured Bonds due 2015 and 2016, Assigned Baa3, LGD3 - 36% Outlook Actions: Issuer: Gannett Co., Inc. -- Outlook, Changed To Negative From Rating Under Review The upgrade of the speculative grade liquidity rating to SGL-3 from SGL-4 reflects Gannett's very good internal liquidity and modest expected cushion within its financial maintenance covenants over the next two years. Gannett's existing cash and projected annual free cash flow in a $375 -$525 million range in 2009 and 2010 provide good near term internal liquidity given the absence of maturities until June 2011. Moody's projects Gannett's free cash flow will be moderately higher than what was anticipated when the liquidity rating was lowered to SGL-4 in April 2009. Key factors driving this change in forecast include deeper-than- anticipated cost reductions, the absence of required pension contributions in 2010, and lower than anticipated cash taxes in 2009. The Ba1 CFR reflects Moody's expectation that Gannett's free cash flow would allow it to obtain a covenant amendment, if necessary, although such an amendment is not factored into the SGL-3 liquidity rating. The negative rating outlook reflects Gannett's elevated debt-to- EBITDA leverage for the rating (approximately 4.1x LTM 6/28/09 incorporating Moody's standard adjustments including the under- funded pension position as debt) and the potential that a deeper or more prolonged downturn not counterbalanced with cash saving initiatives could heighten the risk of a covenant violation over the next 24 months. The negative rating outlook also reflects the growing liquidity pressure that will occur if Gannett does not proactively address its 2011 and 2012 maturities in the near term and the risk that any refinancings will occur at higher interest rates than assumed by Moody's. The last rating action on Gannett was April 20, 2009, when Moody's placed the company's Ba1 CFR, Ba1 PDR and Ba2 senior unsecured notes ratings on review for possible downgrade, and downgraded the liquidity rating to SGL-4 from SGL-3. Gannett Co. Inc., headquartered in McLean, Virginia, is a geographically diversified international news and information company. Annual revenue is approximately $6 billion. GENERAL MOTORS: Board Postpones Opel Sale Decision -------------------------------------------------- Katie Merx at Bloomberg News reports that General Motors Co. postponed a decision on the sale of its Opel division after the board questioned the German government's financing of a bid from Magna International Inc. and sought information on funding for an offer from RHJ International SA. Citing a person familiar with the negotiations, who asked not to be identified because they aren't public, Bloomberg discloses the board didn't get a financing package from the German government for Brussels-based RHJ. GM, Bloomberg says, will ask Germany for more information about financing options, including funding for RHJ. The board hasn't scheduled another meeting or set a deadline for a decision, Bloomberg notes. GM, Bloomberg states, will recommend its preference to the Opel Trust board, the panel assembled to decide Opel's fate. Options Jeff Green and Katie Merx at Bloomberg News reports GM's board is considering all options for its German Opel unit, including rejecting two pending bids and keeping it as a wholly owned subsidiary. Citing a person familiar with the discussions, Bloomberg says new GM directors, dominated by members who joined after a U.S.-backed bankruptcy, are also considering keeping or dissolving Opel. Action Andreas Cremer at Bloomberg News reports German Chancellor Angela Merkel said GM should decide this week on the future of its Opel unit. Bloomberg relates Ms. Merkel, who restated her preference for an offer by Magna, said she "regrets" the failure of GM's board to take action when it reviewed bids for Opel on Aug. 21. The German chancellor, as cited by Bloomberg, said a decision by GM would be "urgently necessary" because of Opel's "economic situation". According to Bloomberg, Ms. Merkel, faced with rising unemployment as national elections loom on Sept. 27, said Magna made a "very good offer" for Opel that she believes will secure more German jobs. Bloomberg recalls Germany agreed to back Opel's sale with EUR1.5 billion (US$2.2 billion) in short-term loans in May, picking Magna as the preferred bidder. The German government offered on Aug. 20 to shoulder the entire EUR4.5 billion in loan guarantees for Magna's offer and negotiate with European Union countries on burden-sharing afterward, Bloomberg recounts. Separately, Andreas Cremer at Bloomberg News, citing the Frankfurter Allgemeine Sonntagszeitung, reports Guido Westerwelle, the leader of the Free Democrats, Ms. Merkel's coalition partner of choice, said the German chancellor shouldn't unduly favor Magna as the preferred buyer of GM's Opel unit. Bloomberg relates Mr. Westerwelle, the party's chairman, told the newspaper in an interview "Giving one-sided preferential treatment to an investor with Russian inclinations neither helps German taxpayers nor Opel workers". Agreement Andreas Cremer at Bloomberg News, citing German Economy Minister Karl-Theodor zu Guttenberg, reports Germany is confident of agreement with GM on a buyer for its Opel unit even after the U.S. carmaker postponed a decision on a possible sale. According to Bloomberg, Mr. Guttenberg told the newspaper the German federal government and authorities from the four states with Opel plants, which all favor Magna's bid, provided GM's board of directors with "all information that in their view will be needed for a decision". Vauxhall Sarah Arnott at The Independent reports Vauxhall's future was hanging in the balance Friday as the board of its US parent company, GM, met to choose between the two competing buyers for its European operations. Vauxhall has two UK factories, in Luton and Ellesmere Port, which employ around 5,000 people. About General Motors Headquartered in Detroit, Michigan, General Motors (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The U.S. Government entity is known as General Motors Company. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: KDB Won't Provide Daewoo Aid Absent Long-Term Plan ------------------------------------------------------------------ Korea Development Bank reiterated in mid-August that it won't provide financial support to GM Daewoo Auto & Technology Co. unless General Motors presents a long-term development plan for the South Korean unit, the Wall Street Journal reports. GM has engaged in "constructive" negotiations with the KDP on new financing aid for Daewoo, which GM Chief Financial Officer Ray Young confirmed over Reuters Television. South Korean officials have said that they are waiting see resolution of New GM's restructuring before completing talks on new financing support for GM Daewoo, Reuters noted. "There is no change in our [existing] stance that no additional funding or refinancing will be made to GM Daewoo if GM plans to operate the Korean unit as just a manufacturing base of small cars," KDB spokesman Sung Ju-young said in a telephone interview with the Journal. Mr. Young has said that GM Daewoo is "a critical element of the new General Motors," offering strategic importance to the Company. Spark Revived GM Daewoo Auto & Technology Co., General Motors Co.'s South Korean unit, introduced the "Spark" minicar, as the automaker seeks to regain market presence by paying more attention to small cars and Asian operations, Seonjin Cha of Bloomberg News reported August 19, 2009. GM Daewoo reportedly spent an equivalent of $236 million in a span of more than 27 months to develop the Spark, the report related. In South Korea, the Spark will cost around 9.06 million won, or US$7,200, to 10.09 million won, with three sub models, Bloomberg said. The Spark, fitted with a 1-liter gasoline engine and four-speed automatic transmission, can travel 17 kilometers per liter, Bloomberg quoted sources as saying. GM Daewoo will market the car domestically starting September 1 under the name Matiz Creative, Bloomberg added. "The Spark can trigger a sales recovery for GM and help cement GM Daewoo's role within GM," said Sohn Myung Woo, a Seoul-based analyst at Woori Investment & Securities Co. "It has a symbolic importance for both GM Daewoo and its parent." Bloomberg, citing sources close to the company, said GM Daewoo will start export production of the Spark late this year. Sales outside of Korea will start early 2010 in Europe. The Spark will be introduced to the U.S. market by 2011. About General Motors Headquartered in Detroit, Michigan, General Motors (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The U.S. Government entity is known as General Motors Company. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: New GM Hikes Production in U.S. & Canada -------------------------------------------------------- General Motors Company said on August 18, 2009, that it is increasing production at several North America assembly plants in response to increased sales. The company will add shifts, overtime and reinstate forecasted down weeks at select facilities. As a result, GM will add about 60,000 vehicles in the third and mainly the fourth quarter production forecast, ensuring a wide selection of high-quality, fuel efficient cars, crossovers and trucks for customers. To help meet the increased demand, GM is adding shifts at CAMI, Ontario, Canada where the next generation Chevy Equinox and all- new GMC Terrain are built; and Lordstown, Ohio, where the fuel- efficient Chevy Cobalt will be built. This will bring approximately 1,350 United Autoworkers and Canadian Autoworkers employees back to the assembly lines. The Chevy HHR and Colorado and the GMC Canyon are also experiencing increased demand. Based on consumer reaction to the Chevy Camaro, Cadillac SRX and CTS Wagon and the Buick LaCrosse, GM anticipates the need to increase production at our plants will continue. "We are running our plants to maintain maximum flexibility and keep production tightly aligned with customer demand," said Tim Lee, GM group vice president, global manufacturing and labor. "The uptick is an encouraging sign that vehicle sales are turning around, and we will ramp up quickly to meet that demand." In July and August, the popular Cash for Clunkers program generated substantial demand for a broad range of fuel efficient vehicles within GM, including the Chevy Aveo, Cobalt, HHR, Malibu, Equinox and Colorado. This latest round of production increases will go a long way in rebuilding dealer inventories to help us meet strong consumer demand, GM said. The U.S. Goverment's Cash for Clunkers program provides incentives to buyers of new cars in exchange of their old, fuel-costly cars. The program, according to Bloomberg News, which initially had a $1 billion funding, was exhausted in its first week. The funding has since been expanded to $3 billion, Matthew Goldstein of Reuters said. "It's gratifying to see demand for our products accelerate and we are extremely lean with inventories on our launch products like Camaro, Equinox, LaCrosse, SRX, CTS Wagon and Terrain," said Mark LaNeve, vice president, U.S. sales. "During the third quarter 2009, we've added production which will result in 35 percent increase over the second quarter. With [the] announcement of further additions, the fourth quarter will now be at least 20 percent higher than the third quarter, which is a very positive trend." According to a report by the USA Today, GM's third quarter 2009 production is expected to be higher by 35% than the second quarter and the automaker anticipates a fourth quarter production 20% higher than the third quarter. With 18.9% of all new vehicles whose clunkers deals had been submitted, Toyota Motor Corp. has overtaken General Motors Co. as the top manufacturer of new vehicles purchased under the U.S. cash-for-clunkers, the Examiner reported August 19. According to a report from the National Highway Traffic Safety Administration, GM accounted for 17.6% as of August 14. NHTS' initial tally on August 5 gave GM the highest Cash for Clunkers sales percentage with 18.7%. Mr. LaNeve, as quoted by Dow Jones Newswires, said U.S. vehicle sales could hit as high as 13.5 million in 2010. Mr. LaNeve believes the industry-wide demand could range between 11 million and 13.5 million, citing that the 13.5 million estimate is "achievable," the report said. In other news, MarketBeat of the Wall Street Journal observed that Motors Liquidation Company, or Old GM, is trading like General Motors Company, a report dated August 12, 2009, noted. MarketBeat cited investors speculating on a pick-up for New GM's business with Motors Liquidation's stock have caused an immediate boost in volume of Motors Liquidation's stock. Indeed, as of August 12, 2009, Motors Liquidation's common stock shares were trading at $1.17 compared to the $0.30 seen in July 2009, MarketBeat pointed out. To recall, trading in the shares of Old GM's common stock was halted July 10, 2009, over confusion brought by the name change with Old GM vs. New GM. Moreover, Old GM shares were regarded as having no value according to regulators. Canada Operations GM Canada is increasing production at its assembly plants in response to increased consumer demand for new GM vehicles. The company will add overtime and a new shift to respond to the strong demand for the new Chevrolet Camaro and Equinox and the GMC Terrain. GM is reinstating the third shift at CAMI, in Ingersoll where the next generation Chevrolet Equinox and the all new GMC Terrain are built. The third shift will begin in October and result in the recall of 350 CAMI team members. Additionally GM Canada has advised employees that overtime for the hot new Camaro at the Oshawa flex line will continue at least through the end of October. The plant has been running steady overtime each Saturday since June to keep up with the high demand and backlog of customer orders for the Camaro. "The addition of the third shift at CAMI and the continued overtime at the Camaro flex line is terrific news for our employees, the CAW, dealers and suppliers. We are running our plants to maintain maximum flexibility and keep production tightly aligned with customer demand. The uptick in sales is an encouraging sign and we are able to ramp up quickly to meet customer needs," said Arturo Elias president, GM Canada. The increased production for our Canadian plants is due to increased demand in Canada and the US and is a demonstration of the customer acceptance of the Equinox and Camaro. The Equinox has the best highway fuel economy in its class and has garnered high praise from the motoring press. The new Camaro with its smokin' hot design and exceptional fuel economy has captured the imagination of customers and led to a solid order bank. About General Motors Headquartered in Detroit, Michigan, General Motors (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The U.S. Government entity is known as General Motors Company. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Toyota to Terminate Nummi Venture in March 2010 --------------------------------------------------------------- Toyota Motor Corp., is planning to end production at the New United Motor Manufacturing, Inc., a factory in which it jointly operates with General Motors, Chang Ran-Kim of Reuters reported on August 16, 2009, citing a report by Asahi Shimbun in Japan. NUMMI, which is based in Fremont, California, has been run by GM and Toyota since 1984 and employs 4,600 workers. Pontiac Vibe station wagon for GM and the Corolla compact car and Tacoma pickup truck for Toyota are manufactured at NUMMI. Production of GM's Pontiac Vibe is due to end this month, Mr. Ran- Kim reported. Citing unnamed sources, the Asahi said that Toyota would transfer production of the Tacoma pickup truck to its light trucks factory in San Antonio, Texas in June 2010. It will move output of the Corolla sedan to its factory in Ontario, Canada, and a factory in Japan, Reuters added. Toyota has started to inform its main suppliers about the plans, the Asahi said, according to the report. GM had said in June 2009 that it is terminating the NUMMI venture amid disagreements on the future product to be manufactured at the facility. In an effort to save the jobs of its 4,500 represented workers, the United Auto Workers union called on its members to urge U.S. lawmakers to impede the probable closure of NUMMI, Reuters reported. Lawmakers in California, as well as Governor Arnold Schwarzenegger have appealed to Toyota to save the NUMMI plant, which 4,500 workers are represented by the United Auto Workers union. About General Motors Headquartered in Detroit, Michigan, General Motors (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The U.S. Government entity is known as General Motors Company. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Close to Signing Deal to Sell Hummer to Chinese --------------------------------------------------------------- General Motors Co. may sign an agreement for the sale of the Hummer sport-utility vehicle business to a Chinese machinery maker this week, Bloomberg News reported, citing two people familiar with negotiations. Executives from prospective buyer Sichuan Tengzhong Heavy Industrial Machinery Co. based in Chengdu, China, are expected to arrive in Detroit early this week for more negotiations with GM, said the people, who asked not to be named because the talks aren't public. An agreement could be signed and announced during the trip, one of the people said. The sale requires U.S. and Chinese regulatory approval. According to Bloomberg, GM Chief Executive Officer Fritz Henderson is working to dispose of half of the automaker's U.S. brands so the carmaker can focus on the four that remain. The Company is eliminating the Pontiac brand, and deals are pending to sell its Saab brand to Swedish sports car maker Koenigsegg Automotive AB and Saturn to Penske Automotive Group Inc. About General Motors Headquartered in Detroit, Michigan, General Motors (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, is the Debtors' restructuring officer. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The U.S. Government entity is known as General Motors Company. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GRANT AFRICAN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Grant African Methodist Episcopal Church Of Los Angeles 10435 South Central Avenue Los Angeles, CA 90002 Bankruptcy Case No.: 09-32456 Chapter 11 Petition Date: August 22, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Giovanni Orantes, Esq. Orantes Law Firm 3435 Wilshire Blvd, 27th Fl Los Angeles, CA 90010 Tel: (888) 619-8222 Fax: (888) 789-5776 Email: go@gobklaw.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-32456.pdf The petition was signed by Rev. Leslie R. White, pastor & chairman of the board of trustees of the Company. GUARANTY FINANCIAL: To File for Chapter 11 as Bank Seized --------------------------------------------------------- Guaranty Financial Group Inc. expects to commence a voluntary case under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas. The Company expects to file the Chapter 11 petition based on the appointment by the Office of Thrift Supervision of the Federal Deposit Insurance Corporation as receiver of Guaranty Bank, the Company's wholly-owned subsidiary. On August 21, 2009, Guaranty Bank, the principal asset of Guaranty Financial, was closed by the OTS and the FDIC was appointed as receiver of the Bank. On the same date, the FDIC transferred certain of the assets and liabilities of the Bank to BBVA Compass or an affiliate. As of June 30, 2009, Guaranty Bank had total assets of $13 billion and total deposits of approximately $12 billion. In addition to assuming all of the deposits of the failed bank, BBVA Compass agreed to purchase $12 billion of the failed bank's assets. The FDIC said it would retain the remaining assets for later disposition. On August 24, the New York Stock Exchange notified the Company that it had suspended the listing of the Company's common stock (NYSE:GFG), effective immediately. The NYSE posted a press release on its Web site stating that the decision to suspend the listings was reached in view of the above events and the NYSE's determination that the Company's securities are no longer suitable for listing on the NYSE. The Company does not intend to request a review of the NYSE action. HARRIS INTERACTIVE: Bell Won't Stand for Re-Election as Chairman ---------------------------------------------------------------- Harris Interactive Inc. said Howard Shecter and Steven Fingerhood have been named Chairman of the Board of Directors and Lead Independent Director, respectively, effective following the 2009 Annual Meeting on October 27, 2009. George Bell, Chairman of the Company's Board of Directors and a member of the Nominating and Corporate Governance Committee, has decided not to stand for re-election at the 2009 Annual Meeting. Recently, Mr. Bell made additional commitments to General Catalyst Partners, where he currently serves as a Managing General Partner, and concluded that those commitments preclude him from further service on the Board. Mr. Bell will continue to serve as Chairman of the Board and a member of the Nominating and Governance Committee until the end of his term, which will occur at the conclusion of the 2009 Annual Meeting. Mr. Shecter, currently serving as Lead Independent Director, will replace Mr. Bell as Chairman of the Board, effective at the end of the Annual Meeting. At that time, Mr. Fingerhood will replace Mr. Shecter as Lead Independent Director. "I was pleased to serve on the Harris Board," Mr. Bell said, "and I have every confidence that the Company has a bright future under its new leadership team." "We want to thank George for his over 5 years of service to the Company. His experience, knowledge and leadership have been instrumental in helping guide the Company through challenging operating conditions. While George will be missed, we are excited for Howard and Steven to assume their new roles on the Board," commented Kimberly Till, President and Chief Executive Officer of Harris Interactive. On September 21, 2007, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders party thereto, pursuant to which the Lenders made available certain credit facilities. As of December 31, 2008, the Company was in violation of the leverage and interest coverage covenants under the terms of the 2007 Credit Agreement. The Company obtained a 30-day waiver of the covenant violations from the Lenders on February 5, 2009, and in connection with the waiver, the 2007 Credit Agreement was amended. The Company obtained an additional 60-day extension of the waiver on March 6. On May 6, and effective as of that date, the Company entered into a further amendment to the 2007 Credit Agreement, pursuant to which the prior covenant defaults were permanently waived and the Company was again in compliance with the terms of the 2007 Credit Agreement, as amended. About Harris Interactive Based in Rochester, New York, Harris Interactive (NASDAQ:HPOL) -- http://www.harrisinteractive.com/-- (NASDAQ:HPOL) provides custom market research. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. HARRIS INTERACTIVE: Board Approves Targets Under 2010 Bonus Plan ---------------------------------------------------------------- Harris Interactive said the Compensation Committee of its Board approved on August 19, the base salaries and target bonus amounts under the Company's fiscal 2010 Corporate Bonus Plan for the Company's executive officers. The Bonus Plan is designed to establish a pool of funds to be available for making bonus payments to the Executive Officers as well as certain other employees of the Company if the Company, on a consolidated basis, achieves budgeted fiscal 2010 operating income, as approved by the Board in connection with establishing the Company's fiscal 2010 annual budget. The percentage achievement of the Financial Target determines the extent to which the Bonus Plan is funded, as follows: the Bonus Plan will be fully funded if the Company achieves 100% of the Financial Target or will be funded at reduced levels if the Company achieves 95%, 90%, 85% or 80% of the Financial Target. The Bonus Plan will not be funded if the Company achieves less than 80% of the Financial Target. The Board, in its discretion, may increase the size of the bonus pool if the Company achieves greater than 100% of the Financial Target. Each Executive Officer (other than Patti Hoffman, Interim Head of Human Resources) is entitled to a bonus amount equal to 70% of his or her target bonus amount multiplied by the Funding Percentage, plus an additional bonus amount equal to thirty percent 30% of his or her target bonus amount multiplied by the Funding Percentage based upon his or her level of achievement of individual qualitative strategic goals and other metrics, as determined by the Board, in its discretion, in the case of the Company's Chief Executive Officer, and as determined by the Executive's manager, in his or her discretion, in the case of the other Executive Officers. The base salary and target bonus amounts (in U.S. dollars except as noted) for the Executive Officers are: Target Executive Officer Base Salary Bonus Amount ----------------- ----------- ------------ Kimberly Till (President and CEO) $600,000 $600,000 Robert Cox (EVP, CFO and Treasurer) $305,000 $152,500 George Terhanian (President, Global Solutions) $300,000 $100,000 Enzo Micali (Global EVP, Operations and Technology) $295,000 $118,000 Frank Forkin (President, North America Client Services $275,000 $110,000 Robert Salvoni (Managing Director, Europe) GBP160,000 GBP64,000 Patti Hoffman (Interim Head of Human Resources) $228,000 N/A Eric Narowski (Principal Accounting Officer and SVP, Global Controller) $174,300 $34,000 On September 21, 2007, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders party thereto, pursuant to which the Lenders made available certain credit facilities. As of December 31, 2008, the Company was in violation of the leverage and interest coverage covenants under the terms of the 2007 Credit Agreement. The Company obtained a 30-day waiver of the covenant violations from the Lenders on February 5, 2009, and in connection with the waiver, the 2007 Credit Agreement was amended. The Company obtained an additional 60-day extension of the waiver on March 6. On May 6, and effective as of that date, the Company entered into a further amendment to the 2007 Credit Agreement, pursuant to which the prior covenant defaults were permanently waived and the Company was again in compliance with the terms of the 2007 Credit Agreement, as amended. Revised Board Commitment Regarding Equity-Based Grants to Employees In October 2007, the Board of Directors committed to its shareholders to limit the number of shares granted via equity- based awards to employees to an average of 2.7% of the total shares of common stock outstanding at the end of the Company's three fiscal years 2008, 2009 and 2010, applying the following formula: (fiscal 2008% + fiscal 2009% + fiscal 2010%)/3 years <= 2.7% Each share of restricted stock granted is counted as the equivalent of two option shares for the purpose of calculating the total number of shares granted in a year under the 2007 Commitment. Since October 2007, to help restore profitability to its business, the Company significantly restructured its senior management team and reduced its workforce by nearly 20%, resulting in substantial forfeitures from departing employees of equity-based grants. However, the 2007 Commitment does not take into consideration these forfeitures. Without accounting for the forfeitures, the number of shares granted via equity-based awards to employees as a percentage of total shares of common stock outstanding ("burn rate") in fiscal years 2008 and 2009 per the 2007 Commitment were 3.64% and 3.58%, respectively. Accounting for forfeitures, however, outstanding equity-based grants to employees during the same period decreased by approximately 2 million shares, or nearly 4% of the Company's total shares of common stock outstanding. Due to the lack of adequate flexibility under the 2007 Commitment to attract a new senior management team through use, in part, of equity-based awards and the need to continue to align the interests of the Company's employees with the interests of its shareholders, management of the Company engaged in discussions with the RiskMetrics Group regarding a potential modification to the 2007 Commitment. In considering whether to support a modification to the 2007 Commitment, RiskMetrics took into account its current annual burn rate criteria applicable to the Company, which would permit an annual burn rate of up to 6.15%. Based on discussions with the Company's management as well as its annual burn rate criteria currently applicable to the Company, RiskMetrics proposed modifying the burn rate percentage, without crediting cancellations or forfeitures, to 4.98% (applied as an average over the measurement period) and the measurement period to fiscal years 2009, 2010 and 2011. The Board supports RiskMetrics proposed modifications. Accordingly, and consistent with RiskMetrics' proposed modifications, the Board commits to its shareholders to limit the number of shares granted via equity-based awards to employees to an average of 4.98% of the total shares of common stock outstanding at the end of the Company's three fiscal years 2009, 2010 and 2011, applying the following formula: (fiscal 2009% + fiscal 2010% + fiscal 2011%)/ 3 years <= 4.98% For the purpose of calculating the total number of shares granted in a year under the Modified Commitment, each share of restricted stock granted will continue to count as the equivalent of two option shares. Although the Board believes that the Modified Commitment preserves the Company's ability to make appropriate equity-based grants for purposes of attracting and retaining talented employees and aligning the interests of its employees with that of its shareholders, it neither plans nor believes it will be necessary to fully utilize the maximum granting capacity available under the Modified Commitment. About Harris Interactive Based in Rochester, New York, Harris Interactive (NASDAQ:HPOL) -- http://www.harrisinteractive.com/-- (NASDAQ:HPOL) provides custom market research. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. HARRIS INTERACTIVE: Posts $700,000 Net Loss for Qrtr Ended June 30 ------------------------------------------------------------------ Harris Interactive Inc. reported financial results for the fourth quarter and full year fiscal 2009. Key Financial Statistics: -- Total revenue for the fourth quarter of fiscal 2009 was $43.5 million, as compared with $63.5 million for the same period in the prior year, representing a decline of $20.0 million or 31.5%. Included in the decline was an unfavorable foreign exchange rate impact of $3.5 million or 18% of our overall revenue decline. -- Operating loss for the fourth quarter of fiscal 2009 was $100,000, as compared with an operating loss of $87.7 million for the same period in the prior year. The operating loss for the fourth quarter of fiscal 2009 included $200,000 in restructuring and other charges. The operating loss for the fourth quarter of fiscal 2008 included an $86.5 million goodwill impairment charge and $2.7 million in restructuring and other charges. -- Net loss for the fourth quarter of fiscal 2009 was $700,000, or $(0.01) per fully diluted share, as compared with a net loss of $85.7 million, or $(1.61) per fully diluted share for the same period in the prior year. -- Non-GAAP Adjusted EBITDA* for the fourth quarter of fiscal 2009 was $2.3 million, as compared with $2.4 million for the same period in the prior year. -- Non-GAAP Adjusted EBITDA* with add-back of restructuring and other charges for the fourth quarter of 2009 was $2.5 million, as compared with $5.1 million for the same period in the prior year. -- Bookings for the fourth quarter of fiscal 2009 were $36.3 million, as compared with $53.3 million for the same period in the prior year. -- Sales backlog for the fourth quarter of fiscal 2009 was $48.8 million, as compared with $66.8 million for the same period in the prior year. As of June 30, 2009, the Company had $86.0 million in total assets; and total current liabilities of $44.5 million, long-term debt of $15.5 million, deferred tax liabilities of $4.7 million, other long-term liabilities of $3.1 million; resulting in shareholders' equity of $18.1 million. "During fiscal 2009, the global recession had a significant impact on the market research industry, especially in the U.S. where the Company generates over 60% of its business. This contraction in the industry contributed to a 23% decline in revenue versus fiscal 2008," commented Kimberly Till, President and Chief Executive Officer of Harris Interactive. "We proactively responded with aggressive cost cutting measures to better align our cost structure with our revenue, taking $22 million in annualized costs out of the business in fiscal 2009. We expect to re-invest approximately $6 million (on an annualized basis) in talent during fiscal 2010 to support our key strategic initiatives," Ms. Till continued. In the fourth quarter of fiscal 2009, the Company's U.S. business generated $1.7 million in operating income, showing the clear benefit of the cost reductions implemented in prior quarters. The Company's cash position of $17.8 million at June 30 remained strong despite a challenging fiscal year, leaving the Company well positioned with the financial resources necessary to deliver on its strategic plan in fiscal 2010. Continued Ms. Till, "While we had a difficult year in the face of a challenging market, I am very pleased with a number of key initiatives we accomplished during the year, including assembling a very strong management team across key areas of the business and investing in business development and client outreach to rebuild revenues." On September 21, 2007, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders party thereto, pursuant to which the Lenders made available certain credit facilities. As of December 31, 2008, the Company was in violation of the leverage and interest coverage covenants under the terms of the 2007 Credit Agreement. The Company obtained a 30-day waiver of the covenant violations from the Lenders on February 5, 2009, and in connection with the waiver, the 2007 Credit Agreement was amended. The Company obtained an additional 60-day extension of the waiver on March 6. On May 6, and effective as of that date, the Company entered into a further amendment to the 2007 Credit Agreement, pursuant to which the prior covenant defaults were permanently waived and the Company was again in compliance with the terms of the 2007 Credit Agreement, as amended. About Harris Interactive Based in Rochester, New York, Harris Interactive (NASDAQ:HPOL) -- http://www.harrisinteractive.com/-- (NASDAQ:HPOL) provides custom market research. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. HARRY MARSHAK: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Harry Marshak Aviva Marshak 611 North Camden Drive Beverly Hills, CA 90210 Bankruptcy Case No.: 09-32389 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtors' Counsel: Michael Jay Berger, Esq. 9454 Wilshire Blvd, 6th Flr Beverly Hills, CA 90212-2929 Tel: (310) 271-6223 Fax: (310) 271-9805 Email: michael.berger@bankruptcypower.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtors' petition, including a list of their 12 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-32389.pdf The petition was signed by the Joint Debtors. HAWAIIAN TELCOM: ACE Group Wants Leave to File Late Claim --------------------------------------------------------- ACE American Insurance Company, ACE Property and Casualty Insurance Company, Illinois Union Insurance Company, and Westchester Surplus Lines Insurance Company ask the Court for leave to file a late proof of claim. David C. Farmer, Esq., in Honolulu, Hawaii, notes that the Debtors have several obligations to the ACE Group under insurance policies issued to the Debtors, including obligations to defend and pay certain claims and to assume the costs of defense for claims up to and including the amount of the Debtors' self- insured retention. He argues that the ACE Group did not receive notice of the Debtors' bankruptcy cases because the Debtors did not include the ACE Group in the creditors' mailing matrix filed with the Court. The Debtors also have not included the ACE Group in the list required under Rule 2002 of the Federal Rules of Bankruptcy Procedure for notice of certain actions and deadlines, he adds. More importantly, the ACE Group did not receive any legal notice about the Debtors' bankruptcy filing or the Apr. 27, 2009 Bar Date. The ACE Group only learned about the Debtors' bankruptcy from a third party after the Bar Date, according to Mr. Farmer. Against this backdrop, Mr. Farmer asserts that under the excusable neglect standard applicable to late-filed proofs of claim, the ACE Group should be allowed to file the late proof of claim. Mr. Farmer insists that the filing of the late claim will not prejudiced the Debtors because it was the Debtors who prejudiced the rights of the ACE Group by failing to provide the required notice of the proof of claim deadline. Similarly, while the ACE Group seeks to file its proof of claim two months after the Bar Date, nothing of consequence has happened during this period in the Debtors' Chapter 11 cases, he says. He emphasizes that the ACE Group's failure to file a proof of claim was the lack of notice from the Debtors of the Bar Date. "This circumstance was not under the ACE Group's control, so there is no actual neglect on the part of the ACE Group," he asserts. Essentially, in filing the Proof of Claim, the ACE Group is seeking to preserve its rights under its insurance agreements with the Debtors, Mr. Farmer says. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc. -- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection on December 1, 2008 (Bankr. D. Del. Lead Case No. 08-13086). As reported by the TCR on December 30, 2008, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors has been appointed and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they listed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of September 30, 2008. Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Hawaiian Telcom Communications, Inc., and seven of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) IMAX CORP: Inks Underwriting Deal With Roth Capital on Shares Sale ------------------------------------------------------------------ IMAX Corporation on August 11, 2009, entered into an underwriting agreement with Roth Capital Partners, LLC, for the sale of 5,882,353 of the Company's common shares, no par value, for $8.50 per share, less the underwriting commission. The Company granted the Underwriter an option to purchase up to an additional 882,353 common shares at the public offering price, less the underwriting commission, within 30 days from the date of the Prospectus Supplement to cover over-allotments, if any. The offering is being made pursuant to the Company's effective registration statement on Form S-3 (Registration Statement No. 333-157300) previously filed with the Securities and Exchange Commission. Pursuant to the Prospectus Supplement, the Company said Public Offering Price is $8.50 a share for a total of $50,000,000. The Underwriting Discount is $0.425 a share for a total of $2,500,000. Proceeds to the Company before expenses is $8.075 for a total of $47,500,000. A full-text copy of the Prospectus Supplement filed August 12 is available at no charge at http://ResearchArchives.com/t/s?42e8 A full-text copy of the Free Writing Prospectus filed August 12 is available at no charge at http://ResearchArchives.com/t/s?42e9 A full-text copy of the Preliminary Prospectus filed August 11 is available at no charge at http://ResearchArchives.com/t/s?42ea About IMAX Corporation IMAX Corporation is one of the world's leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX theatres delivering the world's best cinematic presentations using proprietary IMAX, IMAX(R) 3D, and IMAX DMR(R) technology. IMAX DMR is the Company's groundbreaking digital re-mastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX ExperienceO. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of June 30, 2009, there were 394 IMAX theatres (273 commercial, 121 institutional) operating in 44 countries. As of June 30, 2009, the Company had $270.4 million in total assets and $288.5 million in total liabilities, resulting in $18.1 million in stockholders' deficit. As reported by the Troubled Company Reporter on July 6, 2009, Standard & Poor's Rating Services revised its rating outlook on IMAX to positive from stable. S&P affirmed the existing ratings on the company, including the 'CCC+' corporate credit rating. IMPERIAL INDUSTRIES: Posts $2.43MM Net Loss for 1H of 2009 ---------------------------------------------------------- The Imperial Industries, Inc., posted a net loss of $2.43 million for six months ended June 30, 2009, compared with a net loss of $2.78 million for the same period in 2008. For three months ended June 30, 2009, the Company posted a net loss of $1.63 million compared with a net loss of $833,000 for the same period in 2008. The Company's balance sheet showed total assets of $13.78 million, total liabilities of $10.77 million and stockholders' equity of about $3.01 million. The Company filed an amendment to its Quarterly Report on Form 10- Q for the quarter ended June 30, 2009, which was filed with the U.S. Securities and Exchange Commission on Aug. 19, 2009. The Company relates that the purpose of Amendment No. 1 to Form 10-Q is to correct certain typographical errors in the balance sheet presentation and footnotes relative to the reclassification of certain assets from long-term to current. A full-text copy of the Company's Form 10-Q/A is available for free at http://ResearchArchives.com/t/s?42d2 A full-text copy of the Company's Form 10-Q as originally filed is available for free at http://ResearchArchives.com/t/s?42d3 Going Concern Doubt On March 27, 2009, Grant Thornton LLP in Fort Lauderdale, Florida expressed substantial doubt about substantial doubt about Imperial Industries, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditor noted that the industry in which the Company is operating was impacted by a number of factors over the past 30 months and accordingly, the Company has experienced a significant reduction in its sales volume. The auditor added that the Company's line of credit agreement expires in June 2009, and it has not been extended as of this date. In addition, for the year ended Dec. 31, 2008, the Company has a loss from continuing operations of $4.5 million. About Imperial Industries Based in Pompano Beach, Florida, Imperial Industries, Inc. (Nasdaq: IPII) -- http://www.imperialindustries.com/-- is a building products company. The company sells products throughout the Southeastern United States with facilities in the States of Florida, Georgia, Mississippi, Alabama and Louisiana. JEFFERSON COUNTY: Moody's Affirms 'Caa1' Rating on $270 Mil. Debt ----------------------------------------------------------------- Moody's Investors Service has affirmed the Caa1 rating on Jefferson County's (AL) $270 million in outstanding general obligation debt and Caa2 rating on $86.7 million in outstanding lease revenue warrants issued through the Jefferson County Building Authority. Both ratings carry negative outlooks, despite the recent passage by the State of Alabama of a bill replacing the county's occupational and business license tax, which was struck down by a circuit court judge in January as unconstitutional. While the county has been allowed to continue to collect the tax pending appeal to the state Supreme Court, the collected revenue has been held in escrow until the Court releases its decision. The Court began to hear oral arguments on August 19, but it is not clear when it will rule on the matter or whether it will rule that some or all of the escrowed collections can be retained or must be refunded. The new tax is levied at a rate of 0.45% on salaries, lower than the 0.5% rate of the original tax. The law allows the county to collect at the 0.5% rate through the end of December of this year, at which point the new tax rate will begin. The new tax will apply to professionals, such as attorneys and doctors, who were exempt from the original tax provisions. The law requires that the tax be phased out from October 1, 2012, through October 1, 2016, unless the county holds a referendum in 2012 and voters reauthorize the tax. The revenue from the original tax was approximately $75 million annually, or close to one-third of the county's total annual General Fund budget. The county put nearly 1,000 of its estimated 3,600 employees on temporary leave at the beginning of August in order to reduce expenditures commensurate with the loss of the revenue source. While it is not clear exactly how much revenue the new tax will generate annually, Moody's believes it will be close to the amount collected under the original tax given the only slight provisional change in the rate. As of August 18, the county had yet to bring back the furloughed employees, but Moody's believe the county will begin to bring the employees back once the Supreme Court has made a ruling and the county has a better idea if it will receive the escrowed collections or not. Despite the replacement of the tax, Moody's have affirmed the current general obligation rating of Caa1 and negative outlook. The state Supreme Court still has to determine the constitutionality of the original tax in order for the county to access the escrowed funds, and the result and timing of that decision creates uncertainty around the county's near-term financial stability. The county has also missed two payments on general obligation Bank Warrants, one on September 15, 2008 and one on March 15, 2009, constituting an Event of Default under the Trust Indenture and Liquidity Facilities. Moody's believes that the county will continue to miss these payments until there is a resolution to the financial crisis related to the county's sewer system, and that GO Bank Warrant holders are likely to face some loss of full repayment once the county either restructures the GO debt or begins to make Bank Bond principal payments. Moody's also believe that there is significant risk that the county will avail itself of federal bankruptcy protection. The Caa2 rating and negative outlook on the lease revenue bonds reflects the nature of the security, which is subject to annual budget and appropriation of the county and therefore is weaker than the general obligation rating. The last rating action was on April 28, 2009, when the county's general obligation rating was downgraded Caa1 from B3 and the lease revenue rating was downgraded to Caa2 from Caa1. LEHMAN BROTHERS: Deal Ending Fidelity Open Trade Confirmation ------------------------------------------------------------- As of the Petition Date, the Debtors had entered into, but had not yet consummated and settled, hundreds of trade confirmations. In November 2008, the Debtors designated for assumption an open trade confirmation dated September 12, 2008, between Debtor Lehman Commercial Paper Inc. and Fidelity Management & Research Company, a trade which Fidelity intended to allocate to Fidelity's funds for the sale of debt of Wind Acquisition Holdings Finance S.A. LCPI and Fidelity ask the Court to approve a stipulation they entered into, which provides that the Fidelity Trade is terminated and their rights under the Trade are finally and fully extinguished. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Objections to LBI Trustee's Denial of Claims ------------------------------------------------------------- James Giddens, the trustee of Lehman Brothers, Inc.'s liquidation proceedings under the Securities Investor Protection Act, sent separate notices and letters to more than 100 creditors informing them about his proposed treatment of their claims against LBH. The LBI Trustee denied the claims on grounds that the creditors lack evidence indicating they had relationship with LBI; the cash and securities claimed are not customer property pursuant to SIPA; the creditors' accounts with LBI do not contain cash or securities, among other reasons. More than 40 creditors filed in the U.S. Bankruptcy Court for the Southern District of New York Court their objections to the treatment of their proofs of claim proposed by Lehman Brothers Inc.'s trustee. More than 30 other creditors also expressed disapproval over the denial of their proofs of claim. These creditors, however, are not yet filing formal objections to the treatment of their claims. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Rentenbank to Probe LBSF & LBHI Consolidation -------------------------------------------------------------- Landwirtschaftliche Rentenbank, Germany's agency for agribusiness and rural development, seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to investigate Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. Rentenbak wants the two investigated to determine "whether sufficient facts exist to warrant the substantive consolidation of LBHI with LBSF." The investigation, the agency, says would shed light on the issue of whether or not it has the right to set off its alleged debt to LBSF against LBHI's debt to the agency. Attorney for Rentenbank, Ira Greene, Esq., at Hogan & Hartson LLP, in New York, says that the agency may have the right to set off its alleged debt "if LBHI and LBSF are substantively consolidated." Rentenbank asserts claim against LBHI on account of the EUR30 million it loaned off to Lehman Brothers Bankhaus AG, a Germany-based unit of LBHI. LBHI serves as the guarantor under the loan agreement. LBSF, meanwhile, asserts claims against Rentenbank which stemmed from an ISDA master agreement it inked with the agency. In connection with the proposed investigation, Rentenbank asks the Court to compel LBHI and LBSF to produce a set of documents, and designate a person to be questioned under oath. The hearing to consider approval of the proposed investigation is scheduled for September 16, 2009. Creditors and other concerned parties have until September 11, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: WaMu Wants Lift Stay to Keep Foreclosure Action ---------------------------------------------------------------- Washington Mutual Bank is the holder of an adjustable rate note and mortgage dated December 23, 2003, given by Nedzan Gladan in the amount of $412,500 pledging the property located at 4405 BOB- O-LINK Terrace, Skokie, Illinois, as security. Debtor BNC Mortgage LLC, as mortgagor, defaulted under the terms of the Mortgage and a state court foreclosure commenced in May 2009. WaMu asserts that the Premises are not necessary for the reorganization of the Debtor. Additionally, there is sufficient equity in the Property. WaMu's total lien on the Premises, as of August 11, 2009, is approximately $503,000. According to a broker's price opinion, the Premises has an estimated value "as is market" value of $549,000. Accordingly, WaMu asks the Court to lift the automatic stay to permit it to maintain the foreclosure and eviction proceedings. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Prudential Sues LBSF to Set Off vs. Collateral --------------------------------------------------------------- Prudential Global Funding LLC filed an adversary complaint against Lehman Brothers Special Financing Inc., Lehman Brothers Holdings Inc., and Switzerland-based Lehman Brothers Finance, seeking court declaration that Prudential has a lien on and has properly foreclosed on the collateral that was posted under their swap agreements. The swap agreements govern the derivative transactions executed by Prudential with LBSF and LBF, under which LBSF posted $550,641,243 in cash as collateral to secure its obligations as well as those of LBF under the deal. Following the bankruptcy filing of LBHI, which reportedly constitutes an "event of default" under the swap agreements, Prudential terminated the agreements, foreclosed on the collateral, and applied it to LBSF and LBF's debt in the sum of $686,220,641 -- a move criticized by LBHI and LBSF. LBHI and LBSF questioned Prudential's treatment of the collateral and denied that the company has a security interest in it. Prudential also asks the Court to declare that: (a) it is entitled to set-off, under Section 553 of the Bankruptcy Code, against the collateral amounts owed to it by Lehman Switzerland; and (b) the automatic stay is inapplicable because Prudential enforced its rights before LBSF and Lehman Switzerland filed for bankruptcy or because the relevant agreements are swap agreements and master netting agreements contemplated by the safe harbor provisions of the Bankruptcy Code. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Parent Expects to Continue to Lag Plan in Q3 --------------------------------------------------------------- Pursuant to a teleconference held August 7, 2009, LyondellBasell Vice President for Investor Relations Douglas Pike shared with the investors the company's results for the month of June 2009. Mr. Pike noted that the company's EBITDAR of $928 million is marginally below plan. He cited continued pressure on refining spreads, particularly heavy-light and distillate. He said that oxyfuels margin is strong following seasonal trends. He further noted that olefins have weak margins but reasonable operating rates while intermediates have good margins but weak volumes. With respect to polymers, he mentioned that export opportunities led to strong demand and production rates, which showed some upward price movement. As for the third quarter of 2009, Mr. Pike stated that LyondellBasell expects overall conditions similar to second quarter of 2009 conditions. He related that chemicals and fuels businesses are slightly lagging the plan. Specifically, LyondellBasell expects margin weakness to continue affecting the profitability of LyondellBasell's refineries. Similarly, oxyfuels earnings are expected to be running well ahead of plan while olefins margins are expected to be negatively impacted by feedstock costs. He noted that LyondellBasell expects a strengthening propylene oxide demand compared to the second quarter. LyondellBasell further anticipates that polymers business conditions will generally remain unchanged and that technology and advanced polyolefins businesses will continue to perform on budget, he said. A full-text copy of the Investor Update is available for free at: http://ResearchArchives.com/t/s?4185 About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: To Restart Channelview PO/SM Unit in September ----------------------------------------------------------------- Lyondell Chemical Company announced that a propylene oxide / styrene monomer (PO/SM) unit at Channelview, Texas, will return to service in September due to increased demand for propylene oxide and its derivatives. The unit was temporarily idled in December 2008 due to declining market and economic conditions. "Market conditions for propylene oxide are improving and we have the available capacity to support the increased demand," said Patrick Quarles, Senior Vice President of Intermediates & Derivatives for LyondellBasell. "Having three world-scale PO facilities in North America and three in Europe provides us with considerable flexibility. We are committed to remaining a leading supplier of propylene oxide and derivatives including propylene glycol." LyondellBasell, through its global businesses and joint ventures, has the capacity to produce nearly 4.6 billion pounds per year of propylene oxide at facilities in the United States, Europe and Asia. These facilities include two units at Channelview, as well as propylene oxide units at Pasadena, Texas, at Botlek and Maasvlakte, Netherlands, Fos-sur-Mer, France, and a joint venture in Japan. In addition, an indirect subsidiary of LyondellBasell is a partner in a joint venture site in Ningbo, China, currently under construction. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MANAGED HEALTH: Moody's Gives Positive Outlook, Keeps 'B3' Rating ----------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Managed Health Care Associates, Inc. to positive from stable. At the same time, Moody's affirmed MHA's ratings, including the B3 Corporate Family Rating and the Probability of Default Rating of B3. The positive outlook reflects MHA's strong financial performance relative to Moody's expectations driven by better than expected revenue growth and more favorable operating margins. The improved outlook also reflects faster than expected reduction in financial leverage and the potential for further near-term deleveraging as a result of continued growth in EBITDA and debt repayment funded by the company's strong free cash flow generation. MHA's B3 Corporate Family Rating reflects the company's small absolute size and the considerable financial leverage. Near-term the ratings are constrained by uncertainty around the impact that healthcare reform legislation could have on MHA's business. Longer-term risks include the meaningful number of drug patent expirations on the horizon beginning in 2011, consolidation in the long-term care pharmacy sector or pharmaceutical industry consolidation. Among the company's credit strengths are the strong operating margins and low capital requirements, MHA's dominant position in its niche market and its good liquidity position. Moody's last rating action on MHA was on July 31, 2007, when Moody's assigned ratings to the company in connection with its acquisition by Diamond Castle Holdings, LLC. Ratings Affirmed/LGD assessments revised: * Corporate Family Rating, B3 * Probability of Default Rating, B3 * $15 million senior secured revolving credit facility due 2013, to B1 (LGD2, 28%) from B1 (LGD2, 29%) * $155 million senior secured term loan B due 2014, to B1 (LGD2, 28%) from B1 (LGD2, 29%) * $95 million second lien term loan due 2014, Caa2 (LGD5, 83%) The outlook for the ratings is positive. Headquartered in Florham Park, New Jersey, MHA, is a group purchasing organization for long-term care pharmacies and other classes of trade. The company also offers a variety of services to pharmaceutical manufacturers selling to the LTC industry, including contract administration, marketing, and continuing education. For the twelve months ended June 30, 2009, MHA generated revenues of approximately $85 million. MARC DREIER: List of Fraud Victims Released ------------------------------------------- Crain's New York Business reports that U.S. District Court Judge Jed Rakoff has released the list of Marc Dreier's fraud victims. Court documents say that the list includes: -- Elliot Associates is the biggest loser in the fraud, which is owed about $100 million; -- Fortress, owed about $85 million; -- Eton Park Asset Management, owed about $71 million; -- Concordia Advisors, owed more than $22 million; -- Nike, owed about $243,000; -- COOGI Partners, owed about $48,000; -- Adidas America, owed about $6,000; -- Tommy Hilfiger, owed about $4,000; and -- Diesel USA, owed about $4,000. According to Crain's, the victims had purchased fictitious securities from Mr. Dreier while he was impersonating a real lawyer. Judge Rakoff has ordered Mr. Dreier of repaying more than $388 million to 25 parties, Crain's states. Court documents say that Mr. Dreier also owes more than $500,000 in legal and investigative fees. Crain's relates that the trustee in charge of recovering assets from the fraud has been able to lay claim to just over $100 million, in the form of luxury mansions in the city and the Hamptons, private yachts, vintage cars, and more than 100 pieces of artwork. Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr. S. D. N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been retained as counsel. The Debtor listed assets between $100 million to $500 million, and debts between $10 million to $50 million in its filing. Wachovia Bank National Association, Sheila M. Gowan as trustee for Chapter 11 estate of Dreier LLP, and Steven J. Reisman as postconfirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that sent Mr. Dreier to bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D. N.Y., Case No. 09-10371). The petitioners assert claims totaling $88.5 million. Diamond McCarthy LLP represents Ms. Gowan; Curtis, Mallet Prevost, Colt & Mosle LLP, Mr. Reisman; and McCarter & English LLP, Wachovia Bank. MARKUS KLINKO: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Daryl Lang at Photo District News reports that Markus Klinko has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. Mr. Klinko, according to Photo District, said that his photography business has $1 million to $10 million in liabilities and less than $50,000 in assets. Mr. Klinko said in court documents, "We owe money to many trade vendors which we cannot pay at this time, but anticipate paying under a plan." Photo District relates that All Points Capital Corporation filed a lawsuit against Mr. Klinko in 2007, seeking hundreds of thousands of dollars in unpaid mortgage debts. Markus Klinko is a celebrity photographer. He and fellow photographer Julia Pal-Chaudhuri were formerly a romantic couple and remain business partners. They have photographed A-listers like Will Smith and Beyonce and shot work for major clients including Nike and Vogue. The photographers are scheduled to star in an upcoming reality show on the Bravo network called "Double Exposure". MAYAPPLE LLC: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Mayapple, LLC 50215 Schoenherr Shelbey Township, MI 48315 Bankruptcy Case No.: 09-65996 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Matthew W. Frank, Esq. 30833 Northwestern Hwy, Suite 205 Farmington Hills, MI 48334 Tel: (248) 932-1440 Email: frankandfrank@comcast.net Total Assets: $3,840,131 Total Debts: $2,168,604 A full-text copy of the Debtor's petition, including a list of its 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mieb09-65996.pdf The petition was signed by Joseph Manianci, manager of the Company. MERRILL CORPORATION: Moody's Cuts Corporate Family Rating to 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded Merrill Corporation's corporate family rating to B3 from B2 while also downgrading the company's probability of default rating to Caa1 from B2. The company's senior secured bank credit facility rating remains unchanged at B1 but the second lien debt rating was lowered to Caa2 from Caa1. With these changes and revisions to the company's debt structure, related loss given default assessments were also revised. The rating actions are a consequence, firstly, of updated expectations of the company's ability to generate free cash flow with which to amortize its indebtedness. With recent performance being much weaker than previously anticipated, and with earning's visibility being quite poor, it is not clear whether the company will be able to generate meaningful free cash flow over the next several quarters. In addition, with the company's lenders having recently mandated significant debt amortization early in calendar 2011 (as part of the quid pro quo for providing covenant relief), the uncertainties related to FCF generation suggest that the company may have difficulty making the payment from internally generated sources. In turn, absent then improved credit market conditions providing an ability to refinance its debts and subsequent uncertainty about the availability of potential external sources on economically reasonable terms, Merrill may need to access new capital and/or partially restructure its debts via some form of exchange offering. The former point drives the CFR action while the latter drives the more material PDR downgrade. Pending the early 2011 amortization requirement, Merrill appears to have good liquidity. Over time, however, absent a significant improvement in free cash flow generation, liquidity may deteriorate, and by extension the PDR and CFR may come under additional pressure. Accordingly, the rating outlook remains negative. Rating and outlook actions: Issuer: Merrill Corporation -- Probability of Default Rating, Downgraded to Caa1 from B2 -- Corporate Family Rating, Downgraded to B3 from B2 -- Outlook, Unchanged at Negative Issuer: Merrill Communications LLC -- Senior Secured First Lien Bank Credit Facility, Unchanged at B1 with the LGD Assessment revised to (LGD2, 21%) from (LGD3, 35%) -- Senior Secured Second Lien Bank Credit Facility, Downgraded to Caa2 (LGD4, 69%) from Caa1 (LGD5, 86%) Moody's most recent rating action concerning Merrill was taken on 29 May 2008, at which time the company's B1 CFR was downgraded to B2 and the stable rating outlook was revised to negative following an evaluation of its operating performance and financial results. Merrill's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Merrill's core industry and Merrill's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in St Paul, Minnesota, Merrill Corporation provides a range of document and data management services, litigation support, branded communication programs, fulfillment, imaging and printing services organized along two main business segments, Legal and Financial Transaction Services and Marketing and Communication Solutions. MERRILL LYNCH: BofA Denies Pre-Merger Deception in Bonuses ---------------------------------------------------------- Bank of America Corp. has denied that it misled shareholders about its approval of Merrill Lynch & Co. bonuses before the two firms' merger, court documents say. According to court documents, BofA said that it was "widely understood" that billions of dollars would be awarded for 2008 performance, as Merrill disclosed its intention to pay those bonuses in separate federal filings throughout 2008, As reported by the Troubled Company Reporter on August 11, 2009, U.S. District Judge Jed Rakoff refused to approve Bank of America Corp.'s $33 million settlement of a lawsuit over bonuses tied to its January acquisition of Merrill Lynch & Co., saying the amount isn't appropriate if the bank lied about billions in payments. Judge Rakoff said he needs more information on the accord between the bank and the U.S. Securities and Exchange Commission, which filed the suit. If the SEC is correct that BofA lied about whether to pay the bonuses, then the proposed settlement isn't "remotely reasonable," Judge Rakoff said. Judge Rakoff asked for further filings by August 24 and said he wouldn't be able to approve the settlement before September 9. Dan Fitzpatrick and Kara Scannell report relates that Judge Rakoff gave last week preliminary approval to a separate $150 million settlement of a class-action case alleging that Merrill misled investors about its exposure to subprime-mortgage investments. According to The Journal, the SEC found fault with proxy documents sent to investors in November 2008, claiming that they showed Merrill wouldn't pay year-end bonuses without BofA's consent, while a separate document never distributed to shareholders had BofA approving as much as $5.8 billion. BofA said in a filing on Monday that it never told investors that the payments would be prohibited. The Journal relates that Merrill's compensation committee approved $3.6 billion in bonuses three days after the shareholders' approval of the deal was secured, and Merrill employees received their payouts a day before the merger closed. BofA said in court documents that a November 2008 proxy didn't contain a "flat prohibition" against Merrill incentive compensation and even stipulated that a "negative covenant" restricting year-end bonuses would be subject to exceptions. According to The Journal, the SEC maintained that the $33 million settlement was "fair, reasonable, adequate, and squarely" in the public's interest, and that the penalty "strikes the right balance" between its goals of deterring others from committing similar violations and preventing "unnecessary harm to innocent shareholders." The SEC, The Journal reports, said that it wasn't the payment of the bonuses that is the issue, but failing to disclose them to shareholders and so the size of the bonus isn't a "proper gauge" for the violation and for what the subsequent penalty should be. The investigation didn't support additional charges against BofA "or charges against individuals," The Journal quoted the SEC as saying. According to The Journal, BofA and Merrill depended on lawyers to draft the documents, and without BofA giving up its private talks with lawyers, the SEC said it doesn't have a case. BofA said in court documents that Merrill's federal filings on its planned bonus pay didn't distinguish among base salary, bonuses and other compensation-related expenses, but SEC rules "do not require any such breakdown." About Bank of America Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies with more than $1 trillion in assets under management. Merrill Lynch's operations are organized into two business segments: Global Markets and Investment Banking (GMI) and Global Wealth Management (GWM). As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. MILACRON INC: Investor Group Completes Purchase of Business ----------------------------------------------------------- Milacron LLC said August 24 that it has completed its previously announced purchase of substantially all of the businesses and assets of Milacron Inc. The new company is owned by a group of investors led by Avenue Capital Group and DDJ Capital Management LLC. The completion of this purchase enables the Milacron businesses to emerge from Chapter 11 bankruptcy and puts them in a stronger competitive position than at any time in the past decade. Milacron LLC is a new, privately held entity with a significantly stronger balance sheet including substantially lower debt and greater operating capital. Milacron LLC has more than $500 million fewer liabilities, including more than $230 million, or roughly 80 percent less debt than the previous company. It has also secured a new $55 million revolving credit facility led by Wells Fargo Foothill, part of Wells Fargo & Company (NYSE:WFC), and Bank of America N.A., which was undrawn at close. A $75 million second-lien term loan facility has also been provided by the new investor group. Milacron LLC will be headed by Dennis Smith, the new President and CEO. Mr. Smith comes to the company with a strong operations background and has led significant, successful turnarounds in his last five engagements. "This sale is good news for Milacron LLC and its customers," said Mr. Smith. "The new capital structure, combined with the cost savings of operating as a private entity, gives the company considerable financial strength. We are well positioned to leverage the strengths of our business units and industry-leading brands to bring new solutions to our customers." The new company will continue to operate all of its major businesses, going to market under a business unit structure that retains its global, industry-leading brands including: Milacron Injection and Extrusion, plastics processing machinery, related parts and comprehensive services; DME, mold technologies and services; Uniloy, blow molding and structural foam solutions; and Cimcool, metalworking fluids technology and customer services. "This structure gives our business units greater flexibility to satisfy evolving customer requirements across the globe. Meanwhile, by sharing resources and leveraging our strengths globally, our businesses will be much better positioned to succeed," Mr. Smith said. Mr. Smith will be supported by a strong leadership team with a long history of commitment to Milacron. Dave Lawrence will serve as President of the Injection/Extrusion Plastics Machinery and DME businesses worldwide. As CEO of Milacron, Inc., Lawrence's skills, dedication and efforts were vital to the businesses' expedient emergence from Chapter 11. In this critical new role, his industry knowledge and experience will be a direct benefit to customers. Other members of the new company's leadership team include Bob McKee, who will serve as President of Cimcool, and John Francy, who will serve as Chief Financial Officer and Chief Administrative Officer. Mr. Smith also will serve as President of Uniloy. "I'm delighted to be joining an organization with such a proud history and vibrant brands," said Mr. Smith. "While the economy is still challenging, Milacron is a strong business, thanks to great products, dedicated employees, loyal customers and a supportive industry. I'm excited about the prospects that lie ahead." About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. (Pink Sheets: MZIAQ) supplies plastics-processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron also manufactures synthetic water-based industrial fluids used in metalworking applications. The Company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead Case No. 09-11235). On the same day, the Company filed an ancillary proceeding for reorganization of its Canadian subsidiary under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. The petitions include the Company and its U.S. and Canadian subsidiaries and its non-operating Dutch holding company subsidiary only, and do not include any of the Company's operating subsidiaries outside the U.S. and Canada. Kim Martin Lewis, Esq., Tim J. Robinson, Esq., and Patrick D. Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. Conway, Del Genio, Gries Co., LLC, is the Debtors' financial advisor. Rothschild Inc. is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the noticing, balloting and disbursing agent for the Debtors. Paul, Hastings, Janofsky & Walker LLP, represents DIP Lender General Electric Capital Corp. Taft Stettinius & Hollister LLP is counsel for the Official Committee of Unsecured Creditors. At June 30, 2009, the Company had $528,548,000 in total assets and $818,577,000 in total liabilities. Milacron Inc. asked the Bankruptcy Court to change its name to MI 2009 Inc. following the Court-sanctioned sale of its assets to an investor group. NATIONAL GOLD: Owner Opens Another Coin Dealing Firm ---------------------------------------------------- Jane Meinhardt at Tampa Bay Business Journal reports that National Gold Exchange, Inc. owner Mark Yaffe is operating The Phoenix Gold Corp., which also deals in coins. State corporate records show that Phoenix Gold was incorporated on August 4, with Mr. Yaffe as the sole officer. Business Journal relates that Phoenix Gold sent e-mails to other coin dealers, introducing itself as a wholesale distributor of precious metal products. Business Journal states that Phoenix Gold's address on North Dale Mabry Highway is several doors from National Gold's current location. Tampa, Florida-based National Gold Exchange, Inc., operates a gold and silver rare coin wholesaler. The Company filed for Chapter 11 bankruptcy protection on July 24, 2009 (Bankr. M.D. Fla. Case No. 09-15972). Richard J. McIntyre, Esq., at McIntyre, Panzarella, Thanasides & Eleff assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in debts. MICHAEL MCCULLOUGH: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Michael Brian McCullough fdba Michael Brian Interior Design 42 Smithcliffs Road Laguna Beach, CA 92651 Case No.: 09-18788 Type of Business: The Debtor operates an interior design business. Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Michael G. Spector, Esq. Law Offices of Michael G. Spector 2677 N Main St., Suite 800 Santa Ana, CA 92705 Tel: (714) 835-3130 Fax: (714) 558-7435 Email: mgspector@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mr. McCullough. Debtor's List of 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Credit Card Purchases $57,000 Chase Credit Card Purchases $27,288 Saks Fifth Avenue Credit Card Purchases $21,768 Hollenbeck, Elizabeth Nell Loan $20,000 Chase Credit Card Purchases $19,868 Bank of America Credit Card Purchases $17,194 McCullough, Susan L. Loan $15,000 Barneys New York Credit Card Purchases $8,891 CitiAAdvantage Mastercard Credit Card Purchases $6,990 A to Z Auto Detail Services rendered. $3,100 Bloomingdale's Credit Card Purchases $2,611 Alicia Air Services rendered. $2,000 Bergdorf Goodman Credit Card Purchases $1,015 Phillips 66 - Conoco 76 Credit Card Purchases $478 Exxon Mobil Credit Card Purchases $318 OCALA FUNDING: Moody's Junks Ratings on Subordinated Notes ---------------------------------------------------------- Moody's Investors Service has downgraded the ratings of the Subordinated Notes of Ocala Funding, LLC, to C from B3 on review for possible downgrade. Ocala is sponsored by Taylor, Bean & Whitaker Mortgage Corp. and provides warehouse funding for conforming residential mortgages The rating action is based primarily on the high possibility that the Notes will not be paid on time following a declaration of an Event of Default. On August 13, Bank of America filed a lawsuit against Colonial Bank seeking in excess of $1 billion of payments which Colonial Bank allegedly received from Freddie Mac for the sale of loans in Ocala. Bank of America is the collateral agent, indenture trustee, custodian and depositary agent for Ocala. The Federal investigation and the lawsuit against Colonial raise serious concerns about the viability of the liquidation mechanism during the 45-day period following an Event of Default, the overall program management, including the adequacy of oversight, collateral management, adherence to program documents and segregation of program funds. Previously, on August 3, federal agents raided the offices of mortgage lending firm TBW and two days later the Federal Housing Administration suspended the firm's ability to make loans insured by the federal agency. Subsequently, both Freddie Mac and Ginnie Mae stripped TBW of its approved seller status. The revocation of TBW's approved seller status triggered an Event of Default under the terms of the Ocala program documents. The EOD requires Ocala to cease purchasing loans and cease issuing ABCP. The mortgages backing the facility have to be liquidated no later than 45 days following the declaration of EOD either by delivery to Freddie Mac or, failing that, through an open market sale. Given TBW's loss of approved servicer status, it is unclear whether the loans can be delivered to and will be accepted by Freddie Mac in a timely fashion. Further, as Bank of America -- the custodian to the facility -- is suing Colonial bank for recovery of mortgages and cash, at this stage it is not clear whether mortgages would be available for an open market sale. As an aside, in case of an open market sale the market value risk on non delinquent loans is covered through a swap agreement. Ocala is a single seller mortgage warehouse sponsored by TBW, with a program size of $1.75 billion. Ocala funds the purchase of eligible Freddie Mac mortgage loans that have been sold into forward trade with a qualified counterparty. The facility benefits from swap contracts that cover the interest rate risk and market value risk for non-delinquent, non-defaulted loans. BNP Paribas (Aa1/Prime-1/B) and Deutsche Bank AG (Aa1/Prime-1/B) are the swap counterparties to this transaction. A reserve fund of $20.25 million, representing 1.16% of the program size provides credit support to both the extendible ABCP and the subordinate note. The subordinate note of $67.5 million or 3.9% of the program size, together with the reserve fund, provides credit support to the outstanding ABCP ($1.68 billion or 96% of program size). Complete rating actions are: Issuer: Ocala Funding LLC -- Sub. Notes 2005-A, Downgraded to C; previously on Aug 19, 2009 Downgraded to B3 and Remains On Review for Possible Downgrade -- Sub Notes 2006-A, Downgraded to C; previously on Aug 19, 2009 Downgraded to B3 and Remains On Review for Possible Downgrade -- Sub. Notes 2006-B, Downgraded to C; previously on Aug 19, 2009 Downgraded to B3 and Remains On Review for Possible Downgrade OLD TIME POTTERY: Fails to Extend Credit Pacts, Files for Ch 11 --------------------------------------------------------------- Old Time Pottery, Inc., has filed for Chapter 11 bankruptcy protection after failing to extend its line of credit agreements with its primary lender, Florida Freedom Newspapers reports. Old Time listed $62 million in assets against $41 million in liabilities. According to Florida Freedom, Old Time President Scott Peterson said that the Company has sufficient cash flow to continue to conduct its business as usual in each of its 37 Old Time Pottery stores that it operates in 12 states and that it has no plans to reduce its 1,600 workers. The report states that Old Time CFO Robert Sharp said that the Company is solvent with a strong balance sheet. Old Time's board is developing a plan to further strengthen the Company's business model and financial performance including the replacement of its line of credit, Florida Freedom relates, citing Mr. Peterson. The report quoted him as saying, "We have achieved significant improvements in our operation in 2009 resulting in significant savings. We are evaluating the most prudent course of action to assist us in meeting our operational and financial objectives in the future, including the replacement of our line of credit." Murfreesboro, Tennessee-based Old Time Pottery, Inc., operates 37 bargain home decorating stores in Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, and Tennessee. Old Time Pottery stores offer home decorating items, housewares, seasonal decorations, linens and rugs, glassware, dinnerware, framed art and mirrors, lamps, candles, silk plants and trees among its merchandise. The Company was formed in Murfreesboro in 1985. OLD TIME POTTERY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Old Time Pottery, Inc. 480 River Rock Blvd. P.O. Box 1838 Murfreesboro, TN 37128 Case No.: 09-09548 Type of Business: The Debtor operates a home d�cor retailer chain business. Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Middle District Of Tennessee (Nashville) Judge: Keith M. Lundin Debtor's Counsel: G. Rhea Bucy, Esq. Gullett, Sanford, Robinson, Martin Po Box 198888 Nashville, TN 37219-8888 Tel: (615) 244-4994 Fax: (615) 256-6339 Email: Rbucy@GSRM.com Linda W. Knight, Esq. Gullett Sanford Robinson & Martin Po Box 198888 Nashville, TN 37219 Tel: (615) 244-4994 Fax: (615) 256-6339 Email: LKNIGHT@GSRM.COM Thomas H. Forrester, Esq. Gullett Sanford Robinson & Martin Po Box 198888 Nashville, TN 37219-8888 Tel: (615) 244-4994 Fax: (615) 256-6339 Email: TForrester@GSRM.COM Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Scott M. Peterson, the company's president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ C.Y. Hung Trading Ltd-I $174,522 Chateau Designs $157,334 Concord Enterprises, Inc. $121,013 Dennis East $244,374 Global Housewares $609,496 29th Floor, Soundwill Plaza 38 Russelle Street HONG KONG Leon Korol Company $420,851 2050 Devon Avenue Elk Grove Village IL 60007 Magic Creations $158,468 200 28th Street Mckeesport, PA 15132 Malnekoff Enterprises, Inc. $140,322 Mazel Company $123,066 Northpoint Trading, Inc. $368,917 347 Fifth Avenue Suite 201 New York, NY 10016 Pacific Supreme (Thailand) $244,047 Co, Ltd. Patton Picture $137,278 Perfect Art $197,398 Port to Port Imports, Inc. $165,796 Three Hands $209,143 Tomco-I $343,977 601 Blk A F/F Po Ling Centre 11 Wang Chiu Road KOWLOON HONG KONG Trade Lines, Inc. $124,762 Uma Enterprises $153,938 Unique Treasures Ltd. $252,445 Unit 1801-1802 18/F, Goodview Centr 12 Wu Pak Street Aberdeen HONG KONG Virtual Sales $117,941 OPUS SOUTH: Wants Time to Remove Actions Until Nov. 18 ------------------------------------------------------ Opus South Corp. and its affiliates aver that on and after the Petition Date, they had and have various causes of action and proceedings pending in the courts of various jurisdictions. By this motion, the Opus South Debtors ask the Court to extend the time by which they may file notices of removal: (i) with respect to civil actions they are a party to and pending as of the Petition Date, through November 18, 2009; and (ii) with respect to civil actions they are a party to and initiated after the Petition Date to the later of November 18, 2009, or the time period specified under Rule 9027(a) of the Federal Rules of Bankruptcy Procedure. Section 1452 of Title 28 of the U.S. Code and Bankruptcy Rule 9027 govern the removal of pending civil actions. Section 1452(a) provides that a party may remove a claim or cause of action to the district court for the district where that civil action is pending. A notice of removal may be filed 90 days after the order for relief in the case; 30 days after the entry of a stay termination ruling; or 30 days after a trustee qualified in a Chapter 11 reorganization case but not later than 180 days of the relief. Moreover, with cause, the Court may extend a debtor's removal period. The Debtors aver that they need the extension for the opportunity to make fully informed decisions concerning the removal of each Action. The Debtors maintain that the rights of their adversaries will not be prejudiced by the requested extension because any party to an Action that is removed may seek to have it remanded to the state court. The Court will convene a hearing on August 24, 2009, to consider the Debtors' request. By operation of Rule 9006-2 of the Local Rules for the U.S. Bankruptcy Court for the District of Delaware, the Debtors' Removal Period Deadline is automatically extended until the Court has had an opportunity to consider and act on the Debtors' extension request. About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OPUS SOUTH: Obtains Nod to Auction Calm Waters Property ------------------------------------------------------- Opus South Corp. and its affiliates sought and obtained authority from the Court to sell a property owned by Debtor Calm Waters LLC, provided that the solicitation of bids for the Property will be conducted in consultation with Wachovia Bank, N.A. The Calm Waters Property is subject to a security interest of Wachovia Bank. The Debtors and Wachovia previously reached an agreement with respect to bidding procedures to govern the sale of the Calm Waters Property. The Debtors filed their request in April 2009 to sell the Calm Waters Property, among a group of assets known as the "OS Assets;" however, Wachovia timely filed an objection asserting that the sale of the Calm Waters Property could not proceed without its consent. Subsequently, the Court decided to hear the matter of the Calm Waters separately in accordance with a settlement agreement that the Debtors and Wachovia were negotiating. During the parties' negotiations, Wachovia asserted and the Debtors stipulated that the outstanding balance of Wachovia's loan secured by the Calm Waters Property as of April 22, 2009, was $12,811,671, plus attorneys' fees and other charges. Wachovia made additional protective advances and asserted that the outstanding amount should be (1) an allowed claim in the Debtors' Chapter 11 cases for all purposes without offset, deduction, defense, waiver, recoupment, counterclaim, avoidance or any other form of diminution and (2) an allowed amount for the purposes of credit bidding; provided that if oversecured, an allowed bid will also include postpetition interest and postpetition attorneys' fees. A full-text copy of the Bidding Procedures for the auction of the Calm Waters Property is available for free at: http://bankrupt.com/misc/CalmWatersBidProcs.pdf About Opus South Headquartered in Atlanta, Georgia, Opus South Corporation -- http://www.opuscorp.com/-- provides an array of real estate related services across the United States including real estate development, architecture & engineering, construction and project management, property management and financial services. The Company and its affiliates filed for Chapter 11 on April 22, 2009 (Bankr. D. Del. Lead Case No. 09-11390). Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. The Debtors propose to employ Landis, Rath & Cobb, LLP, as conflicts counsel, Chatham Financial Corporation as real estate broker, Delaware Claims Agency LLC as claims agent. The Debtors have assets and debts both ranging from $50 million to $100 million. OPUS WEST: Contracts to be Assigned at August 27 Auction -------------------------------------------------------- Opus West Corp. and its affiliates notified parties-in-interest of the auction of certain of their assets on August 27, 2009, at 10:00 a.m.. In conjunction with the intended sale of the Debtors' assets, the Debtors may seek to assume and assign related executory contracts and unexpired leases. A list of the contracts and leases the Debtors intend to assume and assign, along with the corresponding cure amounts, is available for free at : http://bankrupt.com/misc/OpWCons.pdf Any objections to the cure amounts must be filed and served on or before August 28, 2009, at 12:00 p.m. If objections are timely filed, they will be heard on August 31, 2009. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. OVERLAND DIRECT: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Overland Direct Gaon, Inc. 18627 Topham Street Tarzana, CA 91335 Bankruptcy Case No.: 09-20899 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Ovsanna Takvoryan, Esq. Takvoryan Law Group, a Professional Corp 450 N Brand Bl, Suite 600 Glendale, CA 91203 Tel: (818) 291-6272 Fax: (818) 484-2126 Email: ovsanna@takvoryanlawgroup.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 6 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-20899.pdf The petition was signed by Giddon Barad, vice president of the Company. PACIFIC ENERGY: Wants Court to Approve Supplemental Incentive Plan ------------------------------------------------------------------ Pacific Energy Resources Ltd. asks the Bankruptcy Court to approve a supplemental incentive plan, which consists of two subparts: the Alaska key employee supplemental incentive plan and the Alaska key employee retention plan (KERP), according to Law360. The two subparts together would pay participating employees up to the relatively de minimis aggregate amount of approximately $100,000 to incentivize those employees to remain with the Debtors while they wind down the Debtor's Alaska operations, the report says. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PALMETTO GREENS: Seeks to Block Carolina Shores Foreclosure Sale ---------------------------------------------------------------- Alan Blondin at TheSunNews.com reports that a September 11 foreclosure sale has been set for Carolina Shores Golf and Country Club in Carolina Shores. The Palmetto Greens course and Carolina Shores Golf & Country Club were used as collateral to secure a development loan so they are subject to the foreclosure by Waccamaw Bank because of a loan default, TheSunNews.com relates, citing David Haidt, owner Mike Matheny's lawyer. According to TheSunNews.com, Mr. Haidt expects to forestall the foreclosure sale with a Chapter 11 filing for that course. "We're trying to reorganize both the development company and the [Palmetto Greens] golf course. We're still trying to work through [Carolina Shores]," TheSunNews.com quoted Mr. Haidt as saying. Cary, North Carolina-based Palmetto Greens Development Company, LLC, is a development company that sells lots around Palmetto Greens Golf & Country Club. The Company filed for Chapter 11 bankruptcy protection on May 7, 2009 (Bankr. E.D. N.C. Case No. 09-03779). David J. Haidt, Esq., at Ayers, Haidt & Trabucco, P.A., assists the Company in its restructuring efforts. The Company listed $1,000,001 to $10,000,000 in assets and $1,000,001 to $10,000,000 in debts. PATHEON INC: Lonza Group Deal Won't Affect Moody's 'B2' Rating -------------------------------------------------------------- Moody's Investors Service said that the proposed acquisition of Patheon Inc. by Lonza Group AG (not rated) for $3.55 per share, announced on August 21, 2009, does not affect the ratings, including the B2 Corporate Family Rating, or the negative outlook. The last rating action was April 21, 2008 when Moody's changed the rating outlook to negative. Patheon, headquartered in Mississauga, Canada, is a leading provider of commercial manufacturing and pharmaceutical development services of branded and generic prescription drugs to the international pharmaceutical industry. Patheon's stock is publicly traded on the Toronto Stock Exchange. For the 12-month period ended April 30, 2009, Patheon reported revenues from continuing operations of $682 million. PEOPLES COMMUNITY: Nasdaq to Delist Shares Effective August 31 -------------------------------------------------------------- The Nasdaq Stock Market, Inc., has determined to remove from listing the common stock of Peoples Community Bancorp, Inc., effective at the opening of the trading session on August 31, 2009. Based on a review of the information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rules 5100, 5110(b) and IM-5100-1. The Company was notified of the Staffs determination on August 5. The Company did not appeal the Staff determination to the Hearings Panel, and the Staff determination to delist the Company became final on August 14. As reported by the Troubled Company Reporter on August 11, 2009, Peoples Community Bancorp said it is insolvent and will be filing a voluntary petition to liquidate its assets under Chapter 11 of the U.S. Bankruptcy Code. Peoples Community's management and board of directors will also be tendering their resignations after the filing of the bankruptcy petition. On August 3, 2009, Fred Darlington tendered his resignation as the Senior Vice President and General Counsel of both Peoples Community Bancorp, Inc., and its wholly-owned banking subsidiary, Peoples Community Bank, with such resignation effective immediately. On May 15, 2009, Peoples Community and its wholly owned subsidiary, Peoples Community Bank, entered into a Purchase and Assumption Agreement, as amended May 27, 2009, with First Financial Bank, N.A., the wholly owned subsidiary of First Financial Bancorp. The Purchase Agreement provided for the purchase of certain of the Bank's assets including 17 of the Bank's branch offices located in southwestern Ohio and southeastern Indiana, approximately $260 million of certain business and consumer loans and other assets, as well as the assumption by the Buyer of approximately $310 million of the Bank's deposits and certain other liabilities. As of June 30, 2009, the Company had approximately $15 million Floating Rate Junior Subordinated Deferrable Interest Debentures outstanding pursuant to an Indenture, dated as of June 30, 2005, between the Company and Wilmington Trust Company, a Delaware banking corporation, as debenture trustee. The July 31, 2009 appointment of the FDIC as receiver constitutes a triggering event, also termed an "Event of Default," under the Indenture. Under the Indenture, an Event of Default occurs if, among other things, the Company or any substantial part of its property, including the Bank, is taken possession by a receiver. Upon such Event of Default, the principal amount of the debentures, together with any premium and interest accrued but unpaid, becomes due upon an Event of Default only after the trustee or holders of not less than 25% in aggregate principal amount of the debentures then outstanding, by notice in writing to the Company (and to the trustee if given by the holders of the debentures), declare such principle and accrued interest immediately due and payable. As of June 30, 2009, the Company had $17.5 million of principal plus accrued interest and fees outstanding under a line of credit with Integra Bank, N.A., which was due and payable on June 30, 2008. In connection with the Purchase Agreement, the Company received a written consent from Integra to, among other things, forbear and refrain from initiating or prosecuting any action in any court to exercise any rights with respect to the Bank's common stock, which is pledged to Integra to secure the Company's line of credit, or exercise any other rights or remedies available to Integra. The Consent terminated upon the termination of the Purchase Agreement. On July 31, 2009, the Office of Thrift Supervision closed the Bank and appointed the Federal Deposit Insurance Corporation as receiver. On the same date, the Bank received written notice from the Buyer that pursuant to Section 25(g) of the Purchase Agreement it was terminating the Purchase Agreement and abandoning the transactions contemplated thereby, effective immediately. Under Section 25(g) of the Purchase and Assumption Agreement, the Buyer had the option to terminate the Purchase Agreement upon the commencement of an insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors or similar proceeding with respect to the Bank or the Company. Headquartered in West Chester, Ohio, Peoples Community Bancorp, Inc. -- http://www.pcbionline.com/-- is the holding company for Peoples Community Bank, a federally chartered savings bank with 19 full service offices in Butler, Warren and Hamilton counties in southwestern Ohio and Dearborn and Ohio counties in southeastern Indiana. PHILADELPHIA NEWSPAPERS: Chief Says Publications Are Viable ----------------------------------------------------------- Philadelphia Newspapers LLC Chief Executive Officer Brian Tierney told Bloomberg News that the reorganizing company's publications are viable and will be debt-free under a reorganization plan. "More efficiencies can be found," Mr. Tierney said in an interview on Bloomberg Television. "We need to find those efficiencies and have a reasonable expectation about return." Philadelphia Newspapers, LLC, and its affiliates filed a Chapter 11 plan of reorganization on August 20. The Plan provides for the sale of substantially all of the Debtors' assets to Philly Papers, LLC, absent higher and better bids at an auction. The buyer group includes Bruce E. Toll, vice chairman of homebuilder Toll Brothers Inc. Mr. Toll was in the group including Chief Executive Brian Tierney who acquired the newspapers from McClatchy Co. in June 2006 for $562 million. On August 20, the Debtors executed that an Asset Purchase Agreement with Philly Papers. Under the deal, Philly Papers will pay to the Debtors' estates a cash purchase price of $30,000,0000, plus an additional cash payment in an amount equal to the Debtors' existing deposits with their insurance carriers and credit card processors, less the amount of accrued and unpaid administrative and priority claims against the Debtors' estates as of the closing of the Plan Sale and less the sum of $750,000, which will be used to fund a liquidating trust for the benefit of the Debtors' general unsecured trade creditors. The Debtors anticipate that the Stalking Horse Agreement will yield gross proceeds to the estates in the amount of over $41,000,000, after payment of approximately $6,000,000 in administrative and priority claims. The Debtors further anticipate that they will have approximately $8,000,000 of cash on hand as of the closing. The purchase proceeds plus cash on hand will be used to pay off any outstanding debtor-in-possession financing facility advances (estimated to be $15,000,000 as of closing) and to make a distribution to the Debtors' senior secured lenders of approximately $36,000,000. Additionally, the Stalking Horse Agreement does not include the sale of the Debtors' real property located at 400 North Broad Street, Philadelphia, Pennsylvania and certain adjacent parcels, which will be transferred to the Agent for the senior secured lenders under the Plan. Finally, the Plan will provide for distribution of 3% of the equity interests in the Stalking Horse (or other successful bidder) to holders of unsecured prepetition creditors other than general trade creditors. The Debtors believe that the value they will realize from the Stalking Horse Agreement constitutes fair market value for their assets and will support a confirmable Plan that will maximize value to their various creditor constituencies and bring a successful conclusion to the Chapter 11 Cases. On that basis the Debtors are prepared to proceed with the sale of their business and assets under the terms of the Stalking Horse Agreement and the Plan, subject to higher and better bids in accordance with bid procedures to be established by the Court. The Debtors have estimated the ultimate distributions that will be made in respect of Allowed Claims and Interests. Liquidation of the Debtors' assets under chapter 7 of the Bankruptcy Code will not result in a higher distribution to any Class of Claims or Interests. The parties contemplate closing of the sale by December 29, 2009. Philly Papers will receive a break-up fee of $1 million and expense reimbursement of up to $500,000 if the Debtors' close a transaction with another party. According to the disclosure statement explaining the Plan, holders of secured claims, including $66 million, senior secured claims, will recover 100 cents on the dollar. Holders of $350 million prepetition unsecured debt claims will recover less than 1% of their claims. Holders of prepetition unsecured trade claims will recover up to 6%. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf A copy of the Insider Plan is available for free at: http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf Senior Lenders' Alternative Plan As reported by the TCR on August 17, senior lenders of Philadelphia Newspapers have asked the Bankruptcy to allow them to submit their own reorganization Plan for the Company. The steering group of prepetition secured lenders and Citizens Bank of Pennsylvania, in its capacity as administrative agent and collateral agent under a Credit and Guaranty Agreement, dated June 29, 2006, with Citizens, and certain other lender parties in the original principal amount of $295,000,000, say they are willing to submit a plan that is superior to the insider-backed plan the Company is filing. The Steering Group Plan provides the Prepetition Lenders with a combination of (a) restructured term debt of the reorganized company, and (b) equity in the reorganized company. In addition, pursuant to the Plan, the Debtors' unsecured mezzanine debt holders will receive, among other things and subject to certain limitations, (a) a pro-rata share of 4.75% of fully diluted new common equity in the form of shares in the reorganized company, and (b) a pro-rata share of 15.0% of fully diluted common equity in the reorganized company in the form of warrants. Each of the Debtors' unsecured creditors that do not hold mezzanine debt will receive a pro rata share of $500,000 in cash, subject to a maximum 10% recovery on each such allowed unsecured claim. The Plan further provides already-arranged exit financing in the amount of $25 million. The lenders' proposal to terminate Philadelphia Newspapers' exclusive rights to propose a Chapter 11 plan is scheduled for hearing on August 28. The Debtors' exclusive rights to file a plan expire August 31. The Steering Group members are Angelo Gordon & Co., CIT Syndicated Loan Group, Credit Suisse Candlewood Special Situations Master Fund LTD., Eaton Vance Management, GECC, and Wells Fargo Foothill. About Philadelphia Newspapers Philadelphia Newspapers -- http://www.philly.com/-- owns and operate numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc. serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. RACKSPACE HOSTING: Two Executives to Liquidate Portion of Holdings ------------------------------------------------------------------ Jim Lewandowski, Senior Vice President, Worldwide Sales of Rackspace Hosting, Inc., and Brian Thomson, Managing Director of Rackspace's UK operating entity, have entered into written stock selling plans for asset diversification purposes in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended and Rackspace's insider trading policy. Pursuant to the Plans, the two executives will gradually liquidate a portion of their holdings in Rackspace. Selling according to the Plans may commence in November 2009. Rule 10b5-1 permits the implementation of written, prearranged stock trading plans by insiders when the insiders are not in possession of material non- public information, and allows the insiders to trade on a regular basis, regardless of any subsequent material non-public information they receive. These trading plans allow insiders to diversify their holdings and to minimize the stock market impact of sales by spreading the sales out over time. The executive officers will report transactions made pursuant to their respective Plans to the Securities and Exchange Commission pursuant to Rule 16(b) of the Exchange Act. Except as required by law, Rackspace does not undertake to report Rule 10b5-1 trading plans by other Rackspace officers or directors or to report modifications, transactions or other activities under Rule 10b5-1 trading plans or the similar plans of any other officer or director. Rackspace had assets aggregating $656,793,000 against debts of $347,970,000 as of June 30, 2009. RADIOSHACK CORPORATION: Share Repurchase Won't Move Moody's Rating ------------------------------------------------------------------ Moody's Investors Service stated that RadioShack Corporation's increase in its share repurchase program has no immediate impact on its Ba1 Corporate Family Rating, SGL-1 Speculative Grade Liquidity Rating, or its stable outlook. Moody's last rating action for RadioShack occurred on August 12, 2008, when its Corporate Family Rating, Speculative Grade Liquidity rating, and outlook were affirmed. RadioShack, headquartered in Fort Worth, Texas, is a leading retailer of consumer electronics and peripherals, as well as a large retailer of cellular phones. Annual revenues for the last twelve months ended June 30, 2009, were over $4.2 billion. RAINBOWS UNITED: Sacks President & CEO Lorraine Dold ---------------------------------------------------- Daniel McCoy at Wichita Business Journal reports that Rainbows United, Inc. Board of Directors said that President and CEO Lorraine Dold's 20 years with the Company had officially come to an end. According to Business Journal, the termination of Ms. Lorraine's employment is part of what Rainbows United Chief Restructuring Officer Hale Ritchie described as continuing efforts to restructure. Business Journal relates that Ms. Dold had been placed on administrative leave after the Company discovered the depths of its financial problems and entered Chapter 11 bankruptcy in July. Mr. Ritchie said in a press release, "We are working through the details of restructuring and working with our creditors and partners so we can continue to serve children with disabilities so they can take their first step, communicate with their families and be successful in their lives." Headquartered in Wichita, Kansas, Rainbows United, Inc. -- http://www.rainbowsunited.org/-- is a Wichita nonprofit agency that serves children with special needs and their families. Rainbows United serves more than 2,600 children aged birth through 5, including more than 2,300 with special needs. The organization, which has 435 full- and part- time employees, serves primarily Sedgwick and Butler counties. Rainbows United filed for Chapter 11 bankruptcy protection on July 30, 2009 (Bankr. D. Kan. Case No. 09-12457). Edward J. Nazar, Esq., at Redmond & Nazar, L.L.P., assists the Company in its restructuring efforts. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. READER'S DIGEST: Files Chapter 11 Petition to Implement Plan ------------------------------------------------------------ The Reader's Digest Association, Inc. and its affiliates filed voluntary pre-arranged petitions under Chapter 11 the U.S. Bankruptcy Code, as part of a previously announced restructuring plan. Prior to the filing, more than 80% of the Company's senior secured lenders had signed on to the plan agreement in principle. The filing applies only to the RDA's U.S. businesses -- its operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand will not be part of the filing. RDA's senior lender group has committed $150 million in new debtor-in-possession financing, which is convertible into exit financing upon emergence. The Company believes this financing will ensure sufficient liquidity during the reorganization process and beyond, and RDA's international operations will have adequate funding based on continuing operations and access to proceeds from the DIP financing. The Company has filed a number of motions to ensure that the filing does not adversely affect day-to-day operations for its employees, customers or suppliers. RDA is seeking -- and fully expects to receive -- approval for a variety of first-day motions, including requests to honor its customer obligations. Suppliers and vendors who provide goods and services to the Company on or after August 24, 2009, will continue to be paid in the ordinary course. Mary Berner, RDA's President and Chief Executive Officer, said, "Our business operations remain solid, with anticipated Fiscal 2009 revenue only down by low single digits, currency neutral, despite the recession. We look forward to emerging with a restructured balance sheet and as a financially stronger organization that is positioned to pursue our growth and transformational initiatives." RDA previously announced on August 17 that it had reached an agreement in principle with a majority of its senior secured lenders on the terms of a restructuring plan to significantly reduce its debt burden and strengthen the company financially for the future. Under the agreement, RDA's senior lenders would exchange a substantial portion of the company's $1.6 billion in senior secured debt for equity, effectively transferring ownership to the lender group. The agreement also establishes the substantive terms of the $550 million in debt that will remain on RDA's balance sheet upon exit. Road to Chapter 11 According to Thomas A. Williams, chief financial officer and senior vice president of Reader's Digest, in the 87 years since the Company published its first magazine edition, Reader's Digest and its predecessors and affiliates have grown into a global, multi-brand media and direct marketing company with over 3,000 employees worldwide (approximately 1,500 in the United States) and annual sales of $2.2 billion. With an editorial philosophy centered around publishing, marketing and delivering products that educate, entertain and inspire, and a highly-diversified customer base, the Debtors have built strong brand loyalty and earned substantial credibility within the media and marketing industry. In fact, the now iconic Reader's Digest magazine recently received the National Magazine Award for General Excellence-the "Oscar" of the publishing industry - by the American Society of Magazine Editors in May 2009. Over the past several years, the Company has been working to transform the perception of "Reader's Digest" as a legacy print brand into a multi-platform media company and emphasize content focused around brand-based affinity communities. At the same time, the Company has been aggressively rethinking their supply chain model and have implemented various restructuring initiatives geared toward improving production capabilities and increasing operational efficiencies to reduce costs and deliver savings that can be re-directed to capture future growth opportunities. These actions have enabled the Debtors to obtain approximately $100 million in cumulative cost-savings through 2009, which has enhanced their competitive position. However, according to Mr. Williams, despite its leading industry position and operational restructuring initiatives, the Company, like most major publishers and consumer marketing businesses, has not been immune to the global financial crisis. The current recession has resulted in reductions in R&D's advertising, retail and subscription revenues, placing pressure on the Debtors' profitability. Withdrawal of foreign lines of credit and pressure from trade creditors have also weakened the Company's liquidity positions, Mr. Williams added. In short, as the economy continues to deteriorate in several of its markets, the Company is struggling to maintain working capital sufficient to conduct operations while facing progressively unsustainable debt service obligations under an over-levered capital structure. Recognizing that their current capital structure was simply unworkable, the Debtors determined that a comprehensive de- leveraging transaction -- through a pre-arranged Chapter 11 plan - - would be in the best long-term interests of the Debtors and their stakeholders. Prepetition Capital Structure Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest has outstanding debt for borrowed money in the aggregate principal amount of approximately $2,183,100,000, consisting primarily of: (a) $1,580,300,000 in secured borrowings under their secured credit facility, (b) $600,000,000 in principal amount of unsecured 9% senior subordinated notes due 2017, and (c) approximately $2,800,000 in foreign lines of credit an a promissory notes. As of August 20, trade creditors have outstanding prepetition claims of $90,000,000. The senior secured facility consists of (i) a six-year $300,000,000 revolving line of credit (ii) a seven-year U.S. term loan in an outstanding amount of $1,182,775,000 and (iii) a $100,000,000 term loan (payable in an equivalent amount of Euros, and designated as "Euro Term Loan") owed to German subsidiary RD German Holdings GmbH. J.P. Morgan Chase is the administrative agent for U.S. term loan and the revolver. A total of $293,700,780 is outstanding under the revolving facility. In R&D's list of 30 largest unsecured creditors, the Bank of New York, as indenture trustee is on the top of the list with its $600,000,000 claim on account of the subordinated notes. HCL follows with a $14,212,268 trade claim. A copy of the largest unsecured creditors' list is available for free at: http://bankrupt.com/misc/sdny09-23529.pdf Chapter 11 Plan Before filing for bankruptcy, Reader's Digest negotiated with senior secured lenders a restructuring plan under which holders of the Company's $1.6 billion in senior secured debt will receive (i) a 300 million second priority term loan, (ii) reinstatement of the prepetition Euro Term Loan, (iii) 100% of the new stock of reorganized Reader's Digest. Holders of unsecured claims related to operations will receive payment in full in the ordinary course. Recovery by holders of other unsecured claims is yet to be determined. The Plan does not provide for any recoveries to the Debtors' senior subordinated noteholders or current equity. There is, however, an "equity buy in" feature that would allow qualifying holders of the Debtors' senior subordinated notes to purchase up to $50 million to 100 million of the shares of the reorganized company, for total ownership of no more than 10% to 20%. A full-text copy of the Restructuring Support Agreement is available for free at http://researcharchives.com/t/s?422e According Reader's Digest, its senior secured debt, during 2009, has traded between 25% and 50% of face amount. The current market indication for its unsecured senior subordinated notes is 1% of face amount. The Company's said that within the 30-day period following the filing, it expects to pay $8,000,000 to employees, $975,000 to officers and directors, and $3,957,000 for financial and business consultants. For the 30-day period following the filing of the Chapter 11 petition, Reader's Digest expects unpaid obligations of $87,878,000 and unpaid receivables of $11,625,000. It expects a net cash gain of $36,004,000: Cash Receipts $221,585,000 Cash Disbursements 185,581,000 ------------ Net Cash Gain $36,004,000 The Debtors are in the process of completing their fiscal year 2009 audit but estimate 2009 Cash EBITDA of approximately $131 million. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells approximately 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. READER'S DIGEST: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Reader's Digest Association, Inc. 1 Reader's Digest Road Pleasantville, NY 10570 Bankruptcy Case No.: 09-23529 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Reader's Digest Sales and Services, Inc. 09-20011 Alex Inc. 09-23530 Allrecipes.com, Inc. 09-23531 Ardee Music Publishing, Inc. 09-23532 Christmas Angel Productions, Inc. 09-23533 CompassLearning, Inc. 09-23534 Direct Entertainment Media Group, Inc. 09-23535 Direct Holdings Americas Inc. 09-23536 Direct Holdings Custom Publishing Inc. 09-23537 Direct Holdings Customer Service, Inc. 09-23538 Direct Holdings Education Inc. 09-23539 Direct Holdings Libraries Inc. 09-23540 Direct Holdings U.S. Corp. 09-23541 Funk & Wagnalls Yearbook Corp. 09-23542 Gareth Stevens, Inc. 09-23543 Home Service Publications, Inc. 09-23544 Pegasus Asia Investments Inc. 09-23545 Pegasus Investment, Inc. 09-23546 Pegasus Sales, Inc. 09-23547 Pleasantville Music Publishing, Inc. 09-23548 R. D. Manufacturing Corporation 09-23549 RD Large Edition, Inc. 09-23550 RD Publications, Inc. 09-23551 RD Walking, Inc. 09-23552 RDA Holding Co. 09-23553 RDA Sub Co. 09-23554 Reader's Digest Children's Publishing, Inc. 09-23555 Reader's Digest Consumer Services, Inc. 09-23556 Reader's Digest Entertainment, Inc. 09-23557 Reader's Digest Financial Services, Inc. 09-23558 Reader's Digest Latinoamerica, S.A. 09-23559 Reader's Digest Sub Nine, Inc. 09-23560 Reader's Digest Young Families, Inc. 09-23561 Reiman Manufacturing, LLC 09-23562 Reiman Media Group, Inc. 09-23563 Retirement Living Publishing Company, Inc. 09-23564 Saguaro Road Records, Inc. 09-23565 Taste of Home Media Group, Inc. 09-23566 Taste of Home Productions, Inc. 09-23567 Travel Publications, Inc. 09-23568 W.A. Publications, LLC 09-23569 WAPLA, LLC 09-23570 Weekly Reader Corporation 09-23571 Weekly Reader Custom Publishing, Inc. 09-23572 World Almanac Education Group, Inc. 09-23573 World Wide Country Tours, Inc. 09-23574 WRC Media, Inc. 09-23575 Type of Business: The Reader's Digest is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The Company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded websites generating 22 million unique visitors per month, and sells approximately 40 million books, music and video products across the world each year. Its global headquarters is Pleasantville, New York. Chapter 11 Petition Date: August 24, 2009 Court: Southern District of New York Debtors' Counsel: James H. M. Sprayregen, Esq. Paul M. Basta, Esq. Nicole L. Greenblatt, Esq. Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10022 Tel: 212-446-4800 Fax: 212-446-4900 http://www.kirkland.com Debtors' Conflicts Counsel: Curtis, Mallet-Prevost, Colt & Mosel LLP 101 Park Avenue New York, New York 10178-0061 Tel: (212) 696 6000 Fax: (212) 697 1559 http://www.curtis.com/ Debtors' Independent Auditor: Ernst & Young LLP 5 Times Square New York, NY 10036-6530 Tel: (212) 773 3000 Fax: (212) 773 6350 http://www.ey.com/ Debtors' Financial Advisor: Miller Buckfire & Co., LLC 153 East 53rd Street, 22nd Floor New York, NY 10022 Tel: (212) 895-1800 Fax: (212) 895-1853 http://www.millerbuckfire.com/ Debtors' Restructuring Consultant: AlixPartners LLC 9 West 57th Street, Suite 3420 New York, New York 10019 Tel: (212) 490-2500 Fax: (212) 490-1344 http://www.alixpartners.com/ Debtors' Claims Agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: 310-823-9000 The Debtors' financial condition as of June 30, 2009: Total Assets: $2,200,000,000 Total Debts: $3,400,000,000 The Debtors' Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Mellon 9% Senior $600,000,000 as Trustee Subordinated 101 Barclay Street - 8W Notes New York, New York 10286 Attention: Global Trust Administration Fax: (212) 815-5704/3272 HCL Trade Claim $14,212,268 A-lO/ll, Sector 3 Noida 201301, U.P. Attn: Vineet Nayar, Chief Executive Officer Tel: 011-91-120-253-5070 Williams Lea Trade Claim $8,867,402 1 Dag Harnmerskjold Plaza, 8th Floor New York, New York 10017 Attn: Justin Barton, CEO The Americas Tel: (212) 351-9020 CDS Global, Inc. Trade Claim $5,421,407 1901 Bell Avenue Des Moines, Iowa 50315-1099 Attn: Malcolm Netbum Chairman & CEO Tel: (515) 246-6802 Quad/Graphics Inc. Trade Claim $2,983,639 N63W 23075 State Hwy. 74 Sussex, Wisconsin 53089-2827 Attn: Joel Quadracci, Vice President Tel: (414) 566-2020 Ti Circulation Trade Claim $2,590,635 Holdings LLC 1271 Avenue of the Americas New York, NY 10020-1393 RR Donnelley Trade Claim $2,417,751 Receivables Inc 6 Cambridge Drive, Suite 302 Trumbull, CT 06611 Attn: Scott Weiss, Global Accounts Director Tel: (203) 854-1961 Quebecor World Inc. Trade Claim $2,349,793 150 East 42nd Street, 11th Fl. New York, New York 10017 Attn: Kevin Clarke, President Tel: (212) 583-6542 Newpage Corporation Trade Claim $2,241,616 6 Evergreen Lane Chappaqua, New York 10514 Attn: Jerry Curran, Account Executive Tel: (914) 238-0445 The Harry Fox Agency Trade Claim $1,808,128 Incorporated 711 Third Avenue New York, New York 10017 Attn: Paul W. Wallace Tel: (212) 834-0108 Myllykoski North America Trade Claim $1,646,889 101 Merritt 7, 5th Floor, Norwalk, Connecticut 06851 Attn: Brendan Lesch, Vice President Tel: (203) 229-7414 Sony Music Special Products Trade Claim $1,070,127 PO Box 371651 Pittsburgh, PA 15251-7651 Attn: Karen Cunningham Tel: (212) 833-7038 SG Chappaqua A LLC Trade Claim $986,279 c/o Greenfield Partners; SG Chappaqua B LLC, C/O Greenfield Partners and summit Development LLC 50 North Water St. South Norwalk, CT 06854 Attn: Barry Marcus Tel: (203) 354-5022 Fax: (203) 354-5060 Universal Music & Video Trade Claim $980,896 Distribution PO Box 98279 Chicago, Illinois 60693 Attn: Kathy Hale Tel: (310) 865-4533 Hung Ring Offset Trade Claim $831,607 Printing Company 17-19 Dai Hei St Tai Po Ind, Est., NT Attn: Matthew Yam, Managing Director Tel: (852) 2664-8682 Rhino Entertainment Trade Claim $802,641 3400 W. Olive Avenue Burbank, California 91505-5538 Attn: Mark Pinkus Tel: (818) 238-6143 Infocrossing Incorporated Trade Claim $772,671 2 Christie Heights Street Leonia, New Jersey 07605 Attn: Sameer Kishore, Chief Operating Officer Tel: (201) 840-4709 Federal Express Corporation Trade Claim $742,759 CORPORATION St. Louis, Missouri Attn: Glenda Corwin, Vice President of Worldwide Services Tel: (913) 661-5029 EDS Corporation Trade Claim $733,507 153 East 53rd Street 28th Floor New York, New York 10022 Attn: John Cunniffe, Client Sales Executive Tel: (212) 610-8146 Anetorder, Inc. Trade Claim $666,509 820 Frontenac Rd Naperville, II 60563 Attn: Shane Randall, President & CEO Tel: (630) 579-8800 A&E Television Networks Royalty Claim $651,568 235 E. 45th Street New York, NY 10017 Attn: Kate Winn, VP Home Video Sales & Marketing Ignite Media Solutions Trade Claim $614,664 1001 St. Petersburg Dr. West Oldsmar, FL 34677 Attn: Michael Ferzacca Tel: (301) 908-6344 Fitness Brands Inc Royalty Claim $600,000 3400RR 620 S, Suite 12101 Austin, TX 78738 Attn: David Brodess Aegis USA Inc. Trade Claim $537,155 211 Monmouth Road West Long Branch, NJ 07764 Attn: General Counselor Officer Inorecords Royalty Claim $522,378 210 Jamestown Park, Suite 100 Brentwood, IN 37027 Attn : John Deakins Cellmark Paper, Inc. Trade Claim $514,256 80 Washington Street Norwalk, CT 06854 Attn: General Counselor Officer Sony BMG Music Entertainment Trade Claim $474,558 39-205 Leopard Street Palm Desert, California 92211 Attn: Lenny Abramowitz Soul Train Holdings LLC Royalty Claim $400,000 1010 Wilshire Blvd., Suite 1502 Los Angeles, CA 90068 Equifax Marketing Services Trade Claim $360,621 2031 W. Pierce, #1B Chicago, Illinois 60622 Attn: Jeff L. Warnock Tel: (773) 862-9733 West Direct, Inc. Trade Claim $341,436 11808 Miracle Hills Dr. Omaha, Nebraska 68154 Attn: Wanda Wacholtz Tel: (402) 964-6364 The Debtor's Largest Secured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ J.P. Morgan Chase as Secured by pledge $1,182,775,000 Administrative Agent for of stock of U.S. Term Loan subsidiaries and Maryann Bui a security JPMorgan Chase Bank N.A. interest in Americas Investment Bank essentially all Loan Operations 1111 Fannin St., 10th Floor Houston, TX 77002 Tel: (713) 750-7932 Fax: (713) 750-2878 J.P. Morgan Chase as Secured by pledge $293,700,779 Administrative Agent for of stock of Revolver subsidiaries and Maryann Bui a security JPMorgan Chase Bank N.A. interest in Americas Investment Bank essentially all Loan Operations 1111 Fannin St., 10th Floor Houston, TX 77002 Tel: (713) 750-7932 Fax: (713) 750-2878 The petition was signed by Thomas A. Williams, chief financial officer and senior vice president. REDDY ICE: Officers Set, Amend Stock Trading Plans With Brokers --------------------------------------------------------------- Reddy Ice Holdings, Inc., said certain officers of the company have established pre-arranged personal stock trading plans, or amended their pre-existing, pre-arranged personal stock trading plans, with brokerage firms under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Rule 10b5-1 enables securities holders to adopt pre-arranged stock trading plans for the purchase or sale of predetermined amounts of securities on a non- discretionary basis. The individuals participating in the plans will purchase shares. These plans may have the effect of spreading stock trades over an extended period of time, thereby reducing market impact. Among others, these officers have elected to enter into Rule 10b5-1 stock trading plans, or amend their pre-existing Rule 10b5-1 stock trading plans, on August 18 or August 19, 2009: -- Gilbert M. Cassagne -- Chairman of the Board, Chief Executive Officer and President; -- Steven J. Janusek -- Executive Vice President, Chief Financial Officer and Secretary; -- Paul D. Smith -- Executive Vice President and Chief Operating Officer; -- William A. Tolany -- Executive Vice President and Chief Customer Officer; and -- Angela S. Wallander -- Executive Vice President and Chief Administrative Officer. The stock trading plans of each to the officers will terminate on June 30, 2010. Purchases of shares pursuant to the stock trading plans will be reported through Form 4 filings with the Securities and Exchange Commission. Except as may be required by law, the company does not report stock trading plans by other company officers or directors, or modifications, transactions or other activities under any previously announced plan. About Reddy Ice Reddy Ice Holdings, Inc. (NYSE:FRZ) is the largest manufacturer and distributor of packaged ice in the United States. With more than 2,000 year-round employees, the Company sells its products primarily under the widely known Reddy Ice(R) brand to a variety of customers in 32 states and the District of Columbia. The Company provides a broad array of product offerings in the marketplace through traditional direct store delivery, warehouse programs and its proprietary technology, The Ice Factory(R). Reddy Ice serves most significant consumer packaged goods channels of distribution, as well as restaurants, special entertainment events, commercial users and the agricultural sector. Reddy Ice Holdings at June 30, 2009, had $448.3 million in total assets; and $36.4 million in total current liabilities, $390.6 million in long-term obligations, $21.5 million in deferred taxes and other liabilities; resulting in $224 million in stockholders' deficit. * * * According to the Troubled Company Reporter on April 13, 2009, Standard & Poor's Ratings Services said that it lowered its ratings on Dallas, Texas-based Reddy Ice Holdings Inc. and its wholly-owned operating subsidiary, Reddy Ice Corp. S&P lowered the corporate credit rating to 'B' from 'B+', and for analytical purposes, S&P views the companies as one economic entity. The outlook is negative. RICHARD LACK: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Joint Debtors: Richard John Lack Amy Eileen Lack 517 Oakshire Place Alamo, CA 94507-2327 Case No.: 09-47791 Chapter 11 Petition Date: August 22, 2009 Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Leslie J. Tchaikovsky Debtors' Counsel: Marc Voisenat, Esq. Law Offices of Marc Voisenat 1330 Broadway #1035 Oakland, CA 94612 Tel: (510) 272-9710 Email: voisenat@gmail.com Estimated Assets: $10,000,000to $50,000,000 Estimated Debts: $1,000,000 to $10,000,000 The petition was signed by the Joint Debtors. Debtors' List of 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Academy Collection Service Advantage Mastercard $16,000 American Express Credit Card Purchases $5,124 American Express Credit Card Purchases $1,129 Chase Credit Card Purchases $7,319 Chase Credit Card Purchases $7,166 Chase (Marriott) Credit Card Purchases $12,093 Homewood Marina Services $6,000 Puget Sound Leasing Guarantee on lease $6,000 for equipment West America Bank Guaranteed business $50,000 Loan S & D INC: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------- Debtor: S & D, Inc. aka Knights Inn of Medford aka Knight's Inn 500 N. Riverside Avenue Medford, OR 97501 Bankruptcy Case No.: 09-64511 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court District of Oregon Judge: Frank R. Alley, III Debtor's Counsel: Keith Y. Boyd, Esq. 88 E Broadway Eugene, OR 97401-2933 Tel: (541) 868-8005 Email: ecf@mb-lawoffice.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 10 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/orb09-64511.pdf The petition was signed by Iqbal Singh Samra, president of the Company. SAXBYS COFFEE: Asks More Time for Schedules & Creditors List ------------------------------------------------------------ Saxbys Coffee Worldwide, LLC, has asked the Hon. Eric Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to extend until September 9 the filing deadline of the list of its creditors, assets, and liabilities, Joseph N. DiStefano at The Philadelphia Inquirer reports. According to Philadelphia Inquirer, Judge Frank had given Saxbys Coffee until August 20 to list its creditors, assets, and liabilities or he'd throw the case out of court. Philadelphia Inquirer relates that Saxbys Coffee filed for bankruptcy after lawsuits were filed in Colorado, Illinois, Nevada, and elsewhere by investors in the Company's previous owner, Saxbys Coffee Inc. Citing Saxybys, Philadelphia Inquirer states that the Atlanta outfit said it wasn't paid enough when the company was sold to Philadelphia developer Joseph Grasso's Walnut Street Capital. President Nick Bayer said that the Company's bankruptcy filing won't delay its expansion, The Philadelphia Inquirer states. The report says that Saxbys Coffee had disclosed plans to open an additional 10 stores in Philadelphia and eight elsewhere. Bankruptcy "is going to allow us to open those shops a little more quickly and a little more efficiently," the report quoted Mr. Bayer as saying. Mr. Bayer, according to Philadelphia Inquirer, said, "Our money had been diverted to these legal cases." Philadelphia Inquirer states that if the Court and creditors agree, the cash will be put to work expanding the chain. Conshohocken, Pennsylvania-based Saxbys Coffee Worldwide, LLC, is a 37-store chain that operates 14 stores in Pennsylvania, where it acquired parts of the former Bucks County Coffee Co. in 2008, along with others scattered from Washington and Atlanta to California. The Company filed for Chapter 11 bankruptcy protection on August 5, 2009 (Bankr. E.D. Pa. Case No. 09-15898). Paul J. Winterhalter, Esq., at Law Offices of Paul J Winterhalter, P.C., assists the Company in its restructuring efforts. The Company listed up to $50,000 in assets and $1,000,001 to $10,000,000 in liabilities when it filed for bankruptcy. SEMGROUP LP: Judge OKs Sale of Assets to Seaco and 71 ----------------------------------------------------- Judge Brendan Shannon authorized the sale or transfer of certain of SemMaterials, L.P.'s assets, free and clear of liens, separately to Seaco, Inc., and 71 Construction. Judge Shannon also approved the sale agreements entered separately among SemMaterials, SeaCo, and 71 Construction. Full- text copies of the sale agreements are available for free at: http://bankrupt.com/misc/semgroup_seacoagreement.pdf http://bankrupt.com/misc/semgroup_71constructionagreement.pdf In a separate order, Judge Shannon authorized Debtor K.C. Asphalt, L.L.C., doing business as SemMaterials Performance Asphalt Company, a subsidiary of SemMaterials, and SemMaterials, to sell certain assets to Suncor Energy (U.S.A.) Inc., free and clear of liens. Judge Shannon further approved the Bill of Sale and Assumption and Assignment between K.C. Asphalt and Suncor, whereby K.C. Asphalt will assume and assign (i) a tank lease entered between K.C. Asphalt and Fruita Development LLC and; (ii) settlements each entered by K.C. Asphalt and Semmaterials with the Department of Public Health and Environment of the State of Colorado. Judge Shannon also held that the cure amount for the Lease is $310,000 while the cure amount for the Settlements is $0. About SemGroup L.P. SemGroup, L.P., -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SENTINEL MGMT: Trustee May Not Sue on Claim Assigned by Creditors ----------------------------------------------------------------- Judge James Zagel of the U.S. District Court for the Northern District Illinois, in Chicago ruled at the end of July that a bankruptcy trustee may not prosecute claims against third parties that belong to individual creditors, even if the creditors assign their claims to the trustee, according to Bill Rochelle at Bloomberg News. According to the report, the case Grede v. Bank of New York Mellon (Case No. 09-1919) involved Sentinel Management Group Inc., the defunct money manager whose liquidating Chapter 11 plan was confirmed in December. The plan allowed creditors to assign claims to the trustee who would in turn mount a lawsuit against Bank of New York Mellon for allegedly aiding and abetting Sentinel's breach of duty to customers. Even though the plan provided that recoveries in the lawsuit would go only to the customers who assigned their claims, Judge Zagel nonetheless ruled that the Sentinel trustee lacks the right to bring the suit, Mr. Rochelle relates. The trustee will appeal, Vincent E. Lazar, counsel for the trustee from Jenner & Block LLP in Chicago, said in an interview. Bankrupt law provides that a bankruptcy trustee may not bring claims that belong only to creditors. Consequently, a trustee may only sue for damages to the bankrupt company. The Sentinel trustee, according to Mr. Rochelle, attempted to sidestep the rule by having the claims assigned to him by creditors. Judge Zagel wasn't persuaded by the argument that the trustee could sue because he was stepping into the shoes of the individual creditors. Judge Zagel said that the bankruptcy trustee is a creature of statute limited to powers conferred in bankruptcy law. The ability to sue on behalf of individual creditors is not one of the powers given to a bankruptcy trustee, Judge Zagel said. SILICON GRAPHICS: Could Liquidate Assets if Plan is Not Confirmed ----------------------------------------------------------------- Silicon Graphics Inc. and its affiliated debtors filed with the U.S. Bankruptcy Court for the Southern District of New York a disclosure statement for its joint Chapter 11 plan of reorganization, wherein (i) holders of allowed claims will receive a greater recovery from the estates of the Debtors than the recovery that they would receive in a liquidation of the Debtors under chapter 7 of the Bankruptcy Code, and (ii) the Debtors will afford the opportunity and ability to restructure and operate its businesses going forward as a viable going concern. According to the disclosure statement, if Plan is not confirmed, the Debtors will be forced to liquidate all assets and distribute the proceeds to the holders of prepetition credit agreement secured claims. There would be a significantly reduced recovery for the holders of prepetition credit agreement secured claims and no recovery for holders of priority tax claims, priority claims, and general unsecured claims. Shares of new common stock describe in the Debtors' disclosure statement will be issued without registration under the Securities Act of 1933, as amended. A hearing is set for Sept. 15, 2009, at 10:00 a.m., to consider approval of the disclosure statement. Objections, if any, are due Sept. 10, 2009, at 5:00 p.m. A full-text copy of the disclosure statement is available for free at http://ResearchArchives.com/t/s?42d6 A full-text copy of the plan of reorganization is available for free at http://ResearchArchives.com/t/s?42d7 About Silicon Graphics Headquartered in Sunnyvale, California, Silicon Graphics Inc. -- http://www.sgi.com/-- delivers an array of server, visualization, and storage software. This is the second bankruptcy filing for Silicon Graphics. The Debtors first filed for Chapter 11 on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Court confirmed the Debtors' Plan of Reorganization on September 19, 2006. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. The Company and 14 of its affiliates filed for protection for the second time on April 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-11701). Mark R. Somerstein, Esq., at Ropes & Gray LLP, represents the Debtors in their restructuring efforts. The Debtors proposed AlixPartners LLC as restructuring advisor; Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor; and Donlin, Recano & Company, Inc., as claims and noticing agent. When the Debtors filed for protection from their creditors, they listed $390,462,000 in total assets and $526,548,000 in total debts as of 2008. On June 4, 2009, the Company amended its Amended and Restated Certificate of Incorporation pursuant to the Certificate of Amendment of Amended and Restated Certificate of Incorporation of Silicon Graphics, Inc., to change its name to Graphics Properties Holdings, Inc. SIMON WORLDWIDE: Posts $466,000 Net Loss for June 30 Quarter ------------------------------------------------------------ Simon Worldwide, Inc., posted a net loss of $466,000 for the three months ended June 30, 2009, from net income of $1,560,000 for the same period in 2008. It posted a net loss of $947,000 for the six months ended June 30, 2009, from net income of $713,000 for the same period the prior year. As of June 30, 2009, the Company had $16,765,000 in total assets and $919,000 in total liabilities, all current. As a result of the loss of its customers, Simon Worldwide no longer has any operating business. Since August 2001, the Company has concentrated its efforts on reducing its costs and settling numerous claims, contractual obligations, and pending litigation. As a result of these efforts, the Company has been able to resolve a significant number of outstanding liabilities that existed at December 31, 2001, or arose subsequent to that date. At June 30, 2009, the Company had reduced its workforce to 4 employees from 136 employees at December 31, 2001. The Company is currently managed by the Chief Executive Officer and principal financial officer, Greg Mays, together with an acting general counsel. The Company continues to incur losses in 2009 within its continuing operations for the general and administrative expenses being incurred to manage the affairs of the Company and resolve outstanding legal matters. By utilizing cash received pursuant to the settlement with McDonald's in 2004, $2.1 million received from Yucaipa AEC in July 2008 and March 2009, and $1.75 million received in settlement of the Company's lawsuit against PricewaterhouseCoopers LLC, management believes it has sufficient capital resources and liquidity to operate the Company for the foreseeable future. In connection with the Company's settlement of its litigation with McDonald's and related entities, the Company received net cash proceeds, after attorney's fees, of approximately $13 million and, due to the elimination of liabilities associated with the settlement of approximately $12 million, the Company recorded a gain of approximately $25 million in 2004. However, as a result of significant losses from operations, a lack of any operating revenue and a potential liquidation in connection with an Exchange and Recapitalization Agreement, the Company's independent registered public accounting firm has expressed substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Board of Directors continues to consider various alternative courses of action for the Company, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions and will continue to do so until it can determine a course of action going forward to best benefit all shareholders. The Company cannot predict when the Board of Directors will have developed a proposed course of action or whether any such course of action will be successful. Management believes it has sufficient capital resources and liquidity to operate the Company for the foreseeable future. In connection with the Recapitalization Agreement, and in the event that the Company does not consummate a business combination by the later of (i) December 31, 2010 or (ii) December 31, 2011 in the event that a letter of intent, an agreement in principle or a definitive agreement to complete a business combination was executed on or prior to December 31, 2010 but the business combination was not consummated prior to such time, and no qualified offer have been previously consummated, the officers of the Company will take all such action necessary to dissolve and liquidate the Company as soon as reasonably practicable. Notwithstanding, the Company will not be required to be dissolved and liquidated if Overseas Toys, L.P., the Company's largest shareholder, or any affiliate thereof shall have made a qualified offer no earlier than 120 days and at least 60 days prior to the termination date and shall have consummated such qualified offer by having purchased all shares of stock properly and timely tendered and not withdrawn pursuant to the terms of the qualified offer. The Company entered into the Exchange and Recapitalization Agreement on June 11, 2008, with Overseas Toys, the holder of all the outstanding shares of preferred stock of the Company, pursuant to which all the outstanding preferred stock would be converted into shares of common stock representing 70% of the shares of common stock outstanding immediately following the conversion. The Recapitalization Agreement was negotiated on the Company's behalf by the Special Committee of disinterested directors which, based in part upon the opinion of the Special Committee's financial advisor, determined that the transaction was fair to the holders of common stock from a financial point of view. At a special meeting held on September 18, 2008, the stockholders of the Company approved amendments to the Company's certificate of incorporation proposed in order to effect a recapitalization of the Company pursuant to the terms of the Recapitalization Agreement. In the exchange, the Company issued 37,940,756 shares of common stock with a fair value of $15.2 million in exchange for 34,717 shares of preferred stock (representing all outstanding preferred shares) with a carrying value of $34.7 million and related accrued dividends of approximately $147,000. The Company recorded $19.7 million to retained earnings in September 2008 representing the excess of carrying value of the preferred stock received over the fair market value of the common shares issued as such difference essentially represented a return to the Company. The Company has federal net operating loss carryforwards of approximately $65.3 million and state NOLs of approximately $35.1 million that may, subject to applicable tax rules, be used to reduce certain income tax obligations in the future. In 2008, California suspended the ability of businesses to use California NOLs to reduce California income tax obligations for tax years 2008 and 2009. Based on a review of the Company's NOLs by its outside tax advisors and with the exception of the two-year NOL suspension implemented by California in 2008, the Company does not anticipate that the recapitalization will materially or adversely impact the Company's ability to use its NOLs. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?42ee Prior to August 2001, the Company was a multi-national, full service promotional marketing company. In August 2001, McDonald's Corporation, the Company's principal customer, terminated its 25-year relationship with the Company as a result of the embezzlement by a former Company employee of winning game pieces from McDonald's promotional games administered by the Company. Other customers also terminated their relationships with the Company, resulting in the Company no longer having a business. By April 2002, the Company had effectively eliminated a majority of its ongoing promotions business operations and was in the process of disposing of its assets and settling its liabilities related to the promotions business and defending and pursuing litigation with respect thereto. The Company has been able to resolve a significant number of outstanding liabilities that existed in August 2001 or arose subsequent to that date. SIX FLAGS: Files Revised Plan With Stock for Lenders ---------------------------------------------------- Six Flags Inc. and its affiliates fine-tuned their proposed plan of reorganization and filed a disclosure statement that now estimates how much creditors can expect in recovery. Prepetition, Six Flags negotiated a plan that would result in a deleveraging of its balance sheet by roughly $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations. Holders of $1.13 billion under the prepetition credit agreement would get 92% of the new stock plus a new $600 million term loan. Their recovery is estimated between 92.2% and 112.8%, according to the new disclosure statement. All other secured Claims against the Debtors that are allowed, if any, will either be paid in full or reinstated, in the Debtors' discretion. Unsecured creditors of Six Flags Operations Inc. with $20 million in claims are to receive 7% of the new stock for a recovery of 8.2% to 12.4%. Unsecured creditors of Six Flags Inc., including holders of $1.27 billion in unsecured notes, are to have 1% of the stock for a dividend estimated to range between 0.4% and 0.6%. All existing equity interests in SFI and subsidiary SFO will be cancelled under the Plan. A copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/SixFlags_DS_AmendedPlan.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Committee Opposes $7.5MM Houlihan Transaction Fee ------------------------------------------------------------ The Official Committee of Unsecured Creditors disagrees, in part, Six Flags Inc. and its affiliates' intent to employ Houlihan Lokey Howard & Zukin Capital, Inc., as their financial advisors and investment bankers. The Creditors Committee objects to the Debtors' request for the pre-approval of a $7,500,000 Transaction Fee to be paid to Houlihan in the event of confirmation of any reorganization plan regardless of Houlihan's role and regardless of what distributions will be made under that Plan. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, in Wilmington, Delaware, informs the Court that Houlihan is to receive $200,000 as monthly retainer and the Debtors propose to pay Houlihan the Transaction fee without a review. Ms. Jones says the Creditors' Committee believes that Debtors' Plan is unconfirmable. Furthermore, the Creditors' Committee anticipates to sponsor an alternative plan the Creditors' Committee expects to be confirmed, thereby making uncertain Houlihan's role in the confirmed Plan. In these circumstances, it would be inappropriate to pre-approve the proposed Transaction Fee for Houlihan, rather, the amount of any transaction fee should not be determined now and should be subject to a review of "reasonableness" and necessity under Section 330(a) of the Bankruptcy Code at the end of the Debtors' Chapter 11 cases, when the results can be judged and the contribution of Houlihan can be fully assessed, Ms. Jones asserts. About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Operations Inc.'s Schedules of Assets & Debts -------------------------------------------------------- A. Real Property $0 B. Personal Property B.3 Security deposits 572,843 B.16 Accounts Receivable Six Flags, Inc. - Intercompany 27,852,503 TOTAL SCHEDULED ASSETS $28,425,346 ========================================================= C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims Citibank, N.A. 19,992,250 JP Morgan Chase as Adm. Agent 1,109,185,000 Papa John's 371,649 E. Creditors Holding Unsecured Priority Claims 0 F. Creditors Holding Unsecured Non-priority Claims: HSBC Bank USA 420,008,333 Time Warner SF LLC 10,000,000 TOTAL SCHEDULED LIABILITIES $1,559,557,234 ========================================================= SIX FLAGS: Operations Inc.'s Statement of Financial Affairs ----------------------------------------------------------- Six Flags Operations Inc. reports that during the two years immediately preceding the Petition Date, it received income from gross sales from operations, excluding intercompany operations: Amount Date ------ ---- $1,358,841 Jan. 1, 2009 - June 12, 2009 ($47,153,361) 2008 ($49,972,200) 2007 According to James Coughlin, general counsel for SFO, during the two years immediately preceding the Petition Date, SFO received $3,496,495 as income from sources other than the operation of its business. Within one year immediately preceding the Petition Date, SFO was or is a party to more than 12 suits and administrative proceedings. A list of the prepetition cases is available for free at http://bankrupt.com/misc/SFO_sofa_cases09.pdf Mr. Coughlin reports that within two years immediately preceding the Petition Date, SFO's books of accounts and records were kept and supervised by: Name Position Date ---- -------- ---- Kyle Bradshaw SVP Finance Sept. 2006 to present Lenny Russ Controller Aug. 2005 to present Jeff Speed CFO/EVP Feb. 2006 to present Within two years immediately preceding the Petition Date, SFO has issued Financial Statements to JP Morgan Chase Bank, NA, as Administrative Agent to the Credit Agreement. These officers or directors own, control, or hold 5% or more of the voting securities of SFO: Direct Ownership ---------------- Six Flags Operations Inc. Sole Shareholder Indirect Ownership ------------------ Six Flags, Inc. Shareholder Directors --------- Mark Quenzel Director and President Jeffrey Speed Director Officers -------- Mark Quenzel President Andrew Scheimer EVP-Strategic Development Danielle J. Bemthal AVP and Asst. Secretary Jeffrey Speed EVP and CFO Kyle Bradshaw SVP Finance Mary A. Roma AVP and Asst. Secretary Walter S. Hawrylak SVP, Admin. & Secretary James Coughlin General Counsel About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Theme Park Unit's Schedules of Assets And Debts ---------------------------------------------------------- A. Real Property Six Flags Great Adventure: Land $12,303,805 Land improvements 14,712,331 Building and improvements 21,540,178 CIP-Land improvements 370,655 CIP-Buildings and improvements 2,947,973 1998 Purchase accounting adjustments 49,482,942 Six Flags Hurricane Harbor NJ: Land 456,645 Land improvements 11,883,552 Buildings and improvements 5,504,619 CIP-Land improvements 31,209 CIP-Buildings and improvements 153,710 1998 Purchase Accounting adjustments 4,870,261 B. Personal Property B.1 Cash on hand - Petty Cash 689 B.2 Bank Accounts 31,010,122 See http://bankrupt.com/misc/SFTP_sal_b2.pdf B.03 Security deposits American Express Deposit Credit Processing 1,500,000 Gen. Liability Insurance Deposit 709,597 Seattle, Enchanted Village Land Deposit 2,693,829 Work Comp. Insurance Deposit 801,661 B.9 Interests in insurance policies 0 B.12 Interests in IRA, ERISA, Koegh, or other pension or profit sharing plans Deferred Trust Assets in Company's Deferred Compensation plan 0 B.13 Stock and interests in incorporated and unincorporated business 0 B.16 Accounts Receivable 393,459,800 See http://bankrupt.com/misc/sftp_sal_b13.pdf B.18 Other liquidated debts owed to debtor including tax refunds - B.23 Licenses Dick Clark Productions 768,309 B.30 Inventory Games Inventory- Grand Prairie, Texas 735,798 Retail Marketing Inventory- Grand Prairie 367,531 B.35 Other personal property Leasehold Improvements, New York 22,926,370 See http://bankrupt.com/misc/sftp_sal_b35.pdf TOTAL SCHEDULED ASSETS $579,231,588 ========================================================= C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims 1,129,548,901 See http://bankrupt.com/misc/sftp_sal_sch_d.pdf E. Creditors Holding Unsecured Priority Claims Total Accrued Bonuses 4,826,286 F. Creditors Holding Unsecured Non-priority Claims 2,584,457,305 TOTAL SCHEDULED LIABILITIES $3,718,832,493 ========================================================= d Investors, Inc., with the U.S. Securities and Exchange Commission is available for free at: http://bankrupt.com/misc/SixF_FedFundProspectus.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SIX FLAGS: Theme Park Unit's Statement of Financial Affairs ----------------------------------------------------------- Six Flags Theme Parks Inc. reports that during the two years immediately preceding the Petition Date, it received income from gross sales from operations, excluding intercompany operations: Amount Date ------ ---- ($14,136,483) Jan. 1, 2009 - June 12, 2009 $20,590,522 2008 ($192,582) 2007 James Coughlin, general counsel for SFTP, says that during the two years immediately preceding the Petition Date, SFTP received $6,034,798 as income from sources other than the operation of its business. Within 90 days immediately preceding the Petition Date, SFTP made payments to creditors on account of property, the value of which are not less than $5,475. A list of payments is available for free at http://bankrupt.com/misc/SFTP_sofa_90-daycreditors.pdf Within one year immediately preceding the Petition Date, SFTP made payments to creditors who are insiders, but SFTP intentionally redacted the page containing the list of its creditor-insiders, intending to keep the list out of public view for confidentiality reasons. Within one year immediately preceding the Petition Date, SFTP was or is a party to more than 40 suits and administrative proceedings. A list of the prepetition cases is available for free at http://bankrupt.com/misc/SFTP_sofa_cases09.pdf According to Mr. Coughlin, for $341,562 value received, SFTP transferred property to Arlington City, Texas, as security within two years immediately preceding the Petition Date. The transfer was made as conveyance of fee simple property interests in 11,324 square feet of land; 750 square feet of drainage easement rights; and 9,284 square feet of temporary construction easement right for road widening purposes. Mr. Coughlin reports that within two years immediately preceding the Petition Date, SFTP's books of accounts and records were kept and supervised by: Name Position Date ---- -------- ---- Kyle Bradshaw SVP Finance Sept. 2006 to present Lenny Russ Controller Aug. 2005 to present Jeff Speed CFO/EVP Feb. 2006 to present Within two years immediately preceding the Petition Date, SFTP has issued financial statements to JP Morgan Chase Bank, NA, as Administrative Agent to the Credit Agreement. The last two inventories on SFTP's property were taken in November and November 2008. The amount of the 2007 inventory was $576,641 and the amount of the 2008 inventory was $529,306. The 2007 inventory was supervised by Lenny Scheistrate, Rob Sarle, Dan Holland, David Russ, David Cook and Sharon Stevens. The 2008 inventory was supervised by Lenny Scheistrate, Rob Sarle, Dan Holland, David Ruffin, Philip Ingle and Sharon Stevens. The records of the 2007 inventory are kept by Lenny Scheistrate, Rob Sarle, Dan Holland, David Russ, David Cook and Sharon Stevens. The records of the 2008 inventory are in the custody of Lenny Scheiestrate, Rob Sarle, Dan Holland, Daniel Ruffin, David Cook, Philip Ingle and Sharon Stevens. These officers or directors own, control, or hold 5% or more of the voting securities of SFTP: Direct Ownership ---------------- Six Flags Theme Park Inc. Sole Shareholder Indirect Ownership ------------------ Six Flags Operations Inc. Shareholder Directors --------- Mark Quenzel Director and President Jeffrey Speed Director, VP and CFO Officers -------- Mark Quenzel President Andrew Schleimer EVP-Strategic Development Angelina Vieira Barocas SVP-Entertaining & Marketing Bob Chesterman VP-Park Strategy and Mgt. Dan Weinberg VP-Entertainment Danielle J. Bemthal AVP and Asst. Secretary Dave McKilips VP-Corporate Alliances Fred Christenson VP-Aquatic Operations Harold Rick Goff VP-Operations James Coughlin General Counsel A full-text copy of the SFTP executive officers is available for free at http://bankrupt.com/misc/sftp_sofa_corporate09.pdf About Six Flags Inc. Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). SPANSION INC: To Sell Suzhou Facility to Powertech Technology ------------------------------------------------------------- In a move designed to lower fixed costs over the long-term, enhance its manufacturing flexibility, and further its restructuring efforts, Spansion Inc. said its wholly owned subsidiary Spansion LLC has signed a definitive agreement with Powertech Technology Inc. to sell to PTI its final manufacturing facility located in Suzhou, China, and certain related equipment. Under the terms of the agreement and subject to U.S. bankruptcy court approval, PTI will pay Spansion LLC approximately $31 million in cash, subject to certain adjustments, over the six months following the closing and Spansion LLC will transfer 100 percent of its shares in its subsidiary Spansion Holdings (Singapore) Pte. Ltd., which is the holding company of the Suzhou facility. Also following the closing, PTI will provide final manufacturing services to Spansion at the Suzhou facility pursuant to a Supply Agreement between Spansion LLC and PTI. The planned sale is another step in Spansion's strategy to focus on its own core competencies and efficiently utilize its assets by shifting to a more variable, outsourced manufacturing model. It also demonstrates further progress in Spansion's corporate reorganization, which is designed to create an operating model to support a leaner, more competitive company that has greater operational efficiencies and is positioned for positive free cash flow and profitability. "As an industry-leading final assembly and test service company, we believe PTI is an ideal final manufacturing resource for Spansion," said John Kispert, Spansion President and CEO. "Spansion is executing on our strategy to refine our business model and focus on our core competencies. We believe this agreement will help Spansion emerge from the Chapter 11 process a stronger and more focused company." The Spansion Suzhou facility is one of four factories in Spansion's final manufacturing network, with approximately 565 employees. Operating in China since 1998, the Suzhou facility is certified to ISO 9001:2000 and ISO/TS 16949:2002 as well as ISO 14001 and OHSAS 18001 standards. Operations at Spansion Suzhou include: multi-chip-package development; high-volume manufacturing of MCP, FBGA, and TSOP packages; assembly, test, mark and pack; and customer support. "We expect an uninterrupted supply of products to our customers after the transfer of ownership of the Suzhou facility," said Ajit Manocha, executive vice president, operations. "In addition, we fully expect to maintain Spansion's high quality standards for customers as we transition to becoming a customer of PTI in the future." The transaction and its final terms are subject to U.S. bankruptcy court approval. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Applies to Hire Ryan as Texas Consultant ------------------------------------------------------ Spansion Inc. and its affiliates seek the Court's authority to retain Ryan, Inc., as their Texas Enterprise Zone consultant, nunc pro tunc to the Petition Date, pursuant to Sections 327(a), 328(a) and 1107 of the Bankruptcy Code. The Debtors have selected Ryan because of the firm's extensive experience and knowledge regarding applications for the Texas Enterprise Zone Program. The Program is an economic development tool for local communities to partner with the state of Texas to encourage job creation, job retention, and capital investment in economically distressed areas of the state. According to the Debtors, Ryan's fees will be based on commission so that it receives no compensation unless the Debtors obtain a tax benefit after submitting the application. Ryan will be compensated on contingency if the Debtors receive any tax refunds, credits, or deductions and depending on the type of project designation: -- 33 1/2% for a Single or Double Jumbo Enterprise Project designation; and -- 25% for a Triple Jumbo Enterprise Project designation. Ryan has also the right to engage legal counsel to seek a refund through an administrative hearing or other legal action, and if successful, will receive a 40% contingency fee for a Single or Double Jumbo Enterprise Project designation and 30% contingency fee for a Triple Jumbo Enterprise Project designation. Trisha C. Fortune, a principal of Ryan, Inc., assures the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. SPANSION INC: Asks for Court Nod to Reject Cadence Contract ----------------------------------------------------------- Spansion Inc. and its affiliates seek the Court's authority to reject their executory contract with Cadence Design Systems, Inc. Spansion LLC and Cadence are parties to a Software License and Maintenance Agreement dated June 29, 2007. Under the License Agreement, Spansion LLC and Cadence entered into that certain Attachment A and B to the Software License and Maintenance Agreement as addendums to the License Agreement. The Attachment provide the Debtors with access to separate pools of software essential to build the flash memory products that Spansion develops. Spansion LLC and Cadence are also parties to a Statement of Work for The Big Sur Project with Spansion LLC dated January 22, 2007, under which Cadence provides engineering support services relating to Spansion LLC's design process with a goal of improving effectiveness and efficiency as well as assisting on various tasks and projects related to the design of Spansion's products. The Debtors relate that they have negotiated with Cadence to obtain new agreements which are "right-sized" for their future business and expect to enter into the replacement agreements retroactive to March 2, 2009. The Debtors say the Replacement Contracts are expected to save them $11,600,000 over the terms of the various agreements, or approximately $282,000 per month for the combined licenses, maintenance and engineering support as compared to the Cadence Contracts. According to the Debtors, they have agreed with Cadence that the rejection date for the Cadence Contracts will be March 2, 2009. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. STANFORD GROUP: Vantis Gets Funds for SIB Antiguan Liquidation -------------------------------------------------------------- Personnel at Vantis PLC appointed as the joint liquidators of Stanford International Bank (SIB) advised that from August 18 onwards, they will be able to use funds of SIB in England and Wales to meet essential ongoing operating costs of the Antiguan liquidation. The Court of Appeal for England & Wales varied the restraint order over the assets, which had previously been obtained by the Serious Fraud Office (SFO) at the request of the United States Department of Justice (US DOJ). The joint liquidators, Nigel Hamilton-Smith and Peter Wastell, have a further appeal that seeks the discharge of the criminal restraint order obtained by the SFO on behalf of the US DOJ. They are requesting the control of the funds so that they can be distributed to investors and creditors, rather than retained with a view to making them available in future to the US DOJ. The date of this appeal has been set as November 16, 2009, which will also include a hearing to deal with the US receiver's appeal against the order of the High Court of July 3, which gave the Antiguan liquidators control of SIB assets located in England and Wales. Separately, proceedings continue in Switzerland, Canada and the US in respect of the joint liquidators' applications for formal recognition of the Antiguan liquidation of SIB and for control of SIB assets located in those jurisdictions. In the meantime, the joint liquidators continue to deal with investors via the Online Claims Management System (https://stanford.vantisplc.com/) and, to date, over 13,000 investors have accessed the service. The joint liquidators will continue to verify and confirm claims. Stanford Trust Company Limited (STC) remains in receivership and is not currently in a position to formally agree claims with its clients and creditors. The liquidators of SIB are, however, aware of the position of STC, and its clients and creditors, and know that STC's clients' claims will be formally registered with SIB in due course. Nigel Hamilton-Smith and Peter Wastell, Client Partners at Vantis Business Recovery Services, a division of Vantis, the UK accounting, tax and business advisory group, were appointed as joint liquidators for Stanford International Bank Limited on April 15, 2009 by an Order of the High Court of Antigua and Barbuda. Media contacts for Vantis Business Recovery Services: Fiona McFadden GyroHSR +44 (0) 7788 572271 fiona.mcfadden@gyrohsr.com Georgina Swain Vantis Press Office +44 (0)20 7549 2451 georgina.swain@vantisplc.com Richard Darby/James Strong Buchanan Communications +44 (0)20 7466 5000 jamess@buchanan.uk.com About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). See http://www.usdoj.gov/criminal/vns STANFORD GROUP: Receiver Faces Criticism & Possible Removal ----------------------------------------------------------- Stanford Financial Group receiver, Ralph Janvey, faces heightened criticism and calls for his removal, Anna Driver at Reuters reports. The report relates that Mr. Janvey is being accused by investors, regulators and politicians of overreaching his authority and overspending on legal bills and consultants. According to the report, the U.S. Securities and Exchange Commission, who recommended Mr. Janvey for the position, now seeks to limit Mr. Janvey's role in the case, while at least one U.S. senator wants him booted from the job. The report relates that about US$269 million in Robert Allen Stanford's assets has been recovered and Mr. Janvey has asked U.S. District Judge David Godbey in Dallas to approve about US$27 million in fees. As reported in the Troubled Company Reporter-Latin America on July 30, 2009, Bloomberg News said that Mr. Janvey said he is seeking to recoup US$925 million tied to certificates of deposit issued by Stanford International Bank Limited. The report related Mr. Janvey expanded an earlier complaint to recover money from Stanford customers as well as brokers whom allegedly profited from a multi-billion fraud. According to the report, the stockbrokers said they were "innocent victims" and some of them invested their own money in the bank's certificates. The report related the brokers' attorneys told U.S. District Judge David Godbey in Dallas that "their only sin is that they were duped by Mr. Stanford's alleged misrepresentations an[d] misdeeds, just like other Stanford clients that the receiver is charged with protecting." The report recalled Mr. Janvey, according to the financial advisers, opposed earlier requests for release of their accounts even as he reached agreements with other investors whose holdings were frozen. Bloomberg News noted the U.S. SEC and John Little, a lawyer appointed by the court to represent Stanford investors' interests, previously urged Judge Godbey to prevent Mr. Janvey from suing about 300 investors to recover more than US$600 million. The report related both claimed the lawsuits would cost more than they would recover and would punish people who are already victims. Reuters relates that Rose Romero, regional director in the SEC's Fort Worth office, told investors at the hearing that her office was exploring ways to limit the scope of the receivership. The report relates that Ms. Romero said that the SEC is considering the possibility of replacing Mr. Janvey as receiver. Meanwhile, the report notes that U.S. Republican Senator David Vitte said he plans to write SEC Chairman Mary Schapiro, asking her to request that Mr. Janvey be replaced with a receiver whose interests are more aligned with investors. About Stanford Group Stanford companies operated by selling certificates of deposit in more than 100 discrete locations spanning 15 states in the United States and 13 countries in Europe, the Caribbean, Canada and Latin America. Stanford claimed to have more than 30,000 clients located in 133 countries. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The U.S. Securities and Exchange Commission, on Feb. 17, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi- billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him in June before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). See http://www.usdoj.gov/criminal/vns STAR GAS: Moody's Upgrades Corporate Family Rating to 'B2' ---------------------------------------------------------- Moody's Investors Service upgraded Star Gas Partners, L.P.'s Corporate Family Rating to B2 from B3. Moody's also upgraded the partnership's senior unsecured notes rating to B3 from Caa1. The outlook is stable. "The upgrade reflects Star Gas' use of the unusually strong cash flows from this past heating season to permanently reduce its long-term debt," commented Pete Speer, Moody's Vice President. "The partnership also completed the refinancing of its bank facility, extending that maturity to 2012." Star Gas' reported EBITDA for the nine months ended June 30, 2009 of $105 million increased by $38 million, or 56% over prior year. This surge in profitability was primarily driven by the rapid decline in wholesale heating oil costs during this past heating season and, to a lesser extent, colder weather. This rapid decline in costs allowed Star Gas to capture much higher margins as it reduced its sales prices at a slower rate. This cash flow generation added to the partnership's already substantial cash balance and allowed Star Gas to opportunistically repurchase $36.3 million par value of its senior unsecured notes, permanently reducing the notes outstanding by 20%. This lower debt burden will better align with the lower level of base earnings expected from the business in a more stable fuel oil and weather environment. The B2 CFR reflects Star Gas' relatively small assets and earnings scale and the continued challenges it faces in growing its customer base through reductions in customer attrition and acquisitions, offset by lower financial risk. Even through Star Gas is the largest distributor of home heating oil in the U.S., the market is highly fragmented, price competitive and seasonal. The stable outlook reflects Moody's expectation that Star Gas will continue to maintain its conservative leverage and distribution policies, that it will manage the pace and integration risks of future acquisitions, and that it will continue to prioritize the use of its substantial cash balance for acquisitions and debt reduction and limit its common unit repurchases within the levels outlined in its recent announcement. The B3 rating for the $137 million senior unsecured notes due 2013 reflects both the overall probability of default of Star Gas, to which Moody's assigns a PDR of B2, and a loss given default of LGD 5 (75% changed from 77%). The $260 million revolving credit facility (unrated) is senior secured and therefore the notes are rated one notch beneath the B2 CFR under Moody's Loss Given Default Methodology. The last rating action was on September 26, 2007 when Star Gas' CFR was upgraded to B3 from Caa1 and its senior unsecured notes ratings were upgraded to Caa1 from Caa3. Star Gas Partners, L.P., a publicly traded MLP based in Stamford, CT, distributes home heating oil and provides related services primarily to residential customers in the New England and Mid- Atlantic regions of the United States. STATION CASINOS: Founder Frank Fertitta Jr. Dies at Age 70 ---------------------------------------------------------- According to Bloomberg News, Frank J. Fertitta Jr., died at age 70. He was the founder, chairman, and chief executive officer of casino operator Station Casinos Inc. Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STILLWATER MINING: S&P Affirms 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings, including its 'B-' corporate credit rating, on Columbus, Montana-based Stillwater Mining Co. S&P removed all ratings from CreditWatch where they were placed with negative implications on July 9, 2009. The outlook is negative. "The affirmation and CreditWatch removal reflect S&P's assessment that the loss of the palladium & rhodium supply agreement between General Motors Corp. and Stillwater will have a minimal impact on Stillwater's profitability and cash flows during the next year," said Standard & Poor's credit analyst Maurice Austin. S&P estimate, based on a palladium price of $270 per ounce and assuming the company's costs are consistent with second-quarter 2009, that EBITDA would decline by less than $2.0 million for the remainder of 2009 and by less than $4.0 million for 2010. S&P would expect cash flow to decline in a range of $1 million to $2 million in 2009 and 2010. S&P currently expect 2009 EBITDA of around $70 million and $100 million in 2010. However, the negative outlook reflects S&P's concern that further deterioration in prices or volumes could hurt the company's earnings and cash flow. Moreover, the company's contract with Ford Motor Co., which currently represents a significant portion of the company's production, expires in 2010. If the company were unable to renew the contract on favorable terms, it would face selling all of its output on the spot market, increasing volatility and downside risk. STINSON PETROLEUM: Court Moves Statement Filing Until September 9 ----------------------------------------------------------------- Hon. Neil P. Olack of the U.S. Bankruptcy Court for the Southern District of Mississippi extended until Sept. 9, 2009, Stinson Petroleum Company, Inc.'s time to file the required documents and statement of financial affairs. Laurel, Mississippi-based Stinson Petroleum Company, Inc., filed for Chapter 11 on Aug. 4, 2009 (Bankr. S. D. Miss.Case No. 09- 51663). The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. Harris Jernigan & Geno, PPLC, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. STINSON PETROLEUM: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------------- Stinson Petroleum Company, Inc., with the U.S. Bankruptcy Court for the Southern District of Mississippi a list of its largest unsecured creditors, disclosing: Entity Claim Amount ------ ------------ 1. World Fuel Services Inc. $1,158,087 9800 N.W. 41st. Street, Suite 400 Miami, FL 33178 2. BP Products North America Inc. $494,726 3333 Warrenville Rd., 8th Floor Office No. 8048 Lisle, IL 60532 3. Placid Refining Co., LLC $198,279 1940 Louisiana Hwy. 1 North Port Allen, LA 70767 4. Bank of Evergreen $150,608 146 W. Front Street P.O. Box 270 Evergreen, AL 36401 5. Marlin Leasing Corp. $35,501 P.O. Box 13604 Philadelphia, PA 19101 6. Maples Gas Co., Inc. $30,838 P.O. Box 292 Meridian, MS 39302 7. Transmontaigne Product Services, Inc. $29,219 1670 Broadway, Suite 3100 Denver, CO 80202 8. AICCO, Inc. $14,710 P.O. Box 200455 Dallas, TX 75320-0455 9. US Bank $14,142 Manifest Funding Service P.O. Box 790448 St. Louis, MO 63170-0448 10. Goodway Refining Co. $12,178 4745 Ross Rd. Atmore, AL 36502 11. Robert Abney $9,444 930 Andiron Court Stone Mountain, GA 30083 12. R.K. Allen Oil Company $5,695 P.O. Drawer 456 Talladega, AL 35161 13. Conway Diesel Service $4,489 100 Conway lane Evergreen, AL 14. North American Ins. $4,248 P.O. Box 30508 Tampa, FL 33630 15. Advanta Bank Corp. $3,186 P.O. Box 8088 Philadelphia, PA 19101-8088 16. United Healthcare Ins. Co. $3,174 Dept. CH 10151 Palatine, IL 60055-0151 17. Rental All of Laurel $3,082 1518 Bush Dairy Road Laurel, MS 39440 18. Boots Smith Trucking, Inc. $2,706 P.O. Drawer 1987 Laurel, MS 39441 19. Herzog Accounting Ser. $2,058 P.O. Box 17986 Hattiesburg, MS 39404 20. Alltell $1,957 P.O. Box 530533 Atlanta, GA 30353-0533 Laurel, Mississippi-based Stinson Petroleum Company, Inc., filed for Chapter 11 on Aug. 4, 2009 (Bankr. S. D. Miss.Case No. 09- 51663). Harris Jernigan & Geno, PPLC, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. STINSON PETROLEUM: Section 341(a) Meeting Scheduled for October 2 ----------------------------------------------------------------- The U.S. Trustee for Region 5 will convene a meeting of creditors in Stinson Petroleum Company, Inc.'s Chapter 11 case on Oct. 2, 2009, at 1:30 p.m. The meeting will be held at William Colmer Federal Building, 701 North Main Street, Room 101, Hattiesburg, Mississippi. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Laurel, Mississippi-based Stinson Petroleum Company, Inc., filed for Chapter 11 on Aug. 4, 2009 (Bankr. S.D. Miss. Case No. 09- 51663). The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. Harris Jernigan & Geno, PPLC, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. STINSON PETROLEUM: Taps Harris Jernigan as Bankruptcy Counsel ------------------------------------------------------------- Hon. Neil P. Olack of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized Stinson Petroleum Company, Inc., to employ Harris Jernigan & Geno, PPLC as counsel. Harris Jernigan is expected to, among other things: -- advise and consult the Debtor-in-possession regarding questions arising from certain contract negotiations which will occur during the operation of business; -- evaluate and attack claims of various creditors who may assert security interests in the assets and who may seek to disturb the continued operation of the business; and -- appear in, prosecute, or defend suits and proceedings, and take all necessary and proper steps and other matters and things involved in or connected with the affairs of the estate of the Debtor. The hourly rates of the firm's personnel are: Craig M. Geno $300 Jeffrey K. Tyree $250 Melanie T. Vardaman $225 Paralegal/Legal Assistants $85 Ms. Vardaman told the Court that the firm received a $36,039 retainer. Ms. Vardaman assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Vardaman can be reached at: Harris Jernigan & Geno, PPLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 Fax: (601) 427-0050 The Bankruptcy Court has also authorized the Debtor to employ Angela T. Herzog as accountant and Kevin Adams and the Jabez Group, LLC, as its third party analyst. About Stinson Petroleum Company, Inc. Laurel, Mississippi-based Stinson Petroleum Company, Inc., filed for Chapter 11 on Aug. 4, 2009 (Bankr. S.D. Miss. Case No. 09- 51663). The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. SUN-TIMES MEDIA: Uses Up Another $3.8MM in Cash in July 2009 ------------------------------------------------------------ Sun-Times Media Group Inc. has burned through another $3.8 million in cash in July 2009, leaving just $19.3 million in cash, court documents say. Citing restructuring expert Bill Brandt, Michael Oneal at Chicago Tribune relates that Sun-Times Media is now close to becoming "administratively insolvent," where cash is insufficient to cover severance and other shutdown costs. The Tribune says that Mr. Brandt's calculation includes millions in accrued professional fees from the bankruptcy case that have yet to be accounted for publicly. According to The Tribune, Sun-Times Media Chairperson Jeremy Halbreich admitted on Friday that cash is running perilously low, but he insisted that he is near to cutting a deal with a suitor willing to save the Company. The Tribune states that Mr. Halbreich has been negotiating with several potential buyers, including a group led by Mesirow Financial Holdings Inc. chairperson Jim Tyree. Buyers are more focused on Sun-Times Media's improved cost structure than its total cash balance, The Tribune relates, citing Mr. Halbreich. Mr. Brandt, according to The Tribune, said that Sun-Times Media is still burning cash operationally, and buyers have to worry about the structural shifts in the advertising market that have plundered revenues for newspaper companies. Prez Nominated to Suburban Newspapers Board Sun-Times Media President and Chief Operating Officer Rick Surkamer was nominated to and endorsed by the Suburban Newspapers of America Board of Directors. The full SNA membership will officially vote on his nomination on September 23, 2009, and upon successful completion of that vote, he will become a Director on the Board. Mr. Surkamer, 56, has served as the Chief Operating Officer of the Sun-Times News Group since September 2007 and was named President in February 2009. Mr. Surkamer joined the Company in January 2007 as Vice President of Operations. Prior to joining the Sun-Times News Group, Mr. Surkamer was President and Chief Operating Officer of Rollex Corp., a manufacturer and distributor of building products based in Elk Grove Village, Illinois. Mr. Surkamer began his career in newspapers with the Chicago Tribune, where he held a variety of managerial positions in circulation, distribution and production. Mr. Surkamer has served on numerous boards, including the Illinois Alliance for Manufacturing; the Economic Development Council of the Illinois Chamber of Commerce as a Founding Chair and Member; and the International Newspaper Group as past Chairman. About Sun-Times Media Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SUNRA COFFEE: Case Summary & 22 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Sunra Coffee LLC, a Hawaii limited liability company aka Royal Hualalai Gardens aka Sunra Kona Coffee LLC aka Royal Kamehameha Gardens 75-1028 Keopu Mauka Drive, #3 Holualoa, HI 96725 Case No.: 09-01909 Type of Business: The Debtor operates a coffee shop. Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court District of Hawaii (Honolulu) Judge: Bankruptcy Judge Robert J. Faris Debtor's Counsel: Don Jeffrey Gelber, Esq. Gelber Gelber & Ingersoll 745 Fort Street, Suite 1400 Honolulu, HI 96813 Tel: (808) 524-0155 Fax: (808) 531-6963 Email: d.j.gelber@gelberlawyers.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Toshio Masuda, the company's member and manager. Debtor's List of 22 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Takano Nakamura Landscaping landscaping goods $250,420 c/o Neal K. Aoki, Esq. and services 1003 Bishop Street Suite 2600 Honolulu, HI 96813 The Maintenance Group LLC landscaping and $104,949 maintenance services E.M. Rivera and Sons, Inc. construction services $93,458 Director of Finance real property taxes $88,963 County of Hawaii, Real Property Tax Jamaica Standard Products coffee plantation $60,370 Co. Ltd. management Jung & Vassar, P.C. legal services $25,381 Attention: Francis L. Jung, Esq. Taryn R. Schuman CPA Inc. accounting services $19,217 Agro Resources, Inc. agricultural services $19,119 Beylik Drilling & Pump equipment purchase $13,025 Service, Inc. and water system repair Nakasato Contracting, LLC construction services $10,000 Wes Thomas & Associates, Inc. surveying services $9,613 Laulima Nursery landscape maintenance $5,773 c/o Hualalai Kona Coffee Co. Ltd. Leleiwi Electric Inc. water system $5,400 contractor Barrett, Todd W. consultant services $3,561 c/o Island Land Co. All Hawaii Water Treatment water management $3,125 services Mountain Thunder Coffee coffee purchase $2,907 Plantation Int'l Inc. Yuen, Kenn Q. consultant services $1,679 MacDonald Rudy Byrns O'Neill legal services $1,508 & Yamauchi LLP Black Label Construction construction services $406 RevaComm, Inc. website services $375 Hawaiian Telcom utility services $323 The Kona Coffee & Tea trade debt $100 Company, Inc. T MUTHU KUMAR: Section 341(a) Meeting Scheduled for September 16 ---------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in T Muthu Kumar's Chapter 11 case on Sept. 16, 2009, at 10:00 a.m. The meeting will be held at 411 W Fourth St., Room 1-159, Santa Ana, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. San Clemente, California-based T Muthu Kumar dba Himalaya and Himalaya Consulting filed for Chapter 11 on Aug. 5, 2009 (Bankr. C.D. Calif. Case No. 09-18043). Jeffrey S. Benice, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. TAYLOR BEAN: Files for Chapter 11; Neil Luria Named CRO ------------------------------------------------------- Taylor, Bean & Whitaker Mortgage Corp. has filed for relief under Chapter 11 of the U.S. Bankruptcy Code. The Company said in an August 24 statement that the filing follows a series of events in recent weeks that have crippled its business operation. On August 3, 2009, the Federal Housing Administration suspended Taylor Bean's authority to issue FHA-insured loans, which was immediately followed by notices from the Government National Mortgage Association (Ginnie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) suspending Taylor Bean as an issuer of mortgage-backed securities and mortgage seller/servicer. These agencies immediately transferred servicing from Taylor Bean to other providers. Taylor Bean appealed the Freddie Mac termination and intends to appeal the HUD and Ginnie Mae terminations later this month, but has no way to continue normal business operations in the interim. Therefore, the Company was forced to abruptly lay off about 2,000 employees on August 5, 2009. The Company believes that these events are related to various investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean's primary bank. On or about August 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf - such as homeowner's insurance premiums and real estate taxes. Taylor Bean is currently in discussions with the FDIC, the receiver for Colonial, in hopes that this circumstance can be remedied immediately and so that individual borrowers are not affected further by Taylor Bean's inability to access its Colonial bank accounts. These events also resulted in the issuance of cease and desist orders and other administrative proceedings by numerous state regulators. Taylor Bean has been in ongoing discussions with these regulators since early August and hopes that these can be resolved in the near future. As a result of these events and the impact on Taylor Bean's business operation, the company today filed for Chapter 11. Under Chapter 11, Taylor Bean will operate on a scaled-down basis and begin the work of recovering, restructuring and possibly liquidating its assets. The Chapter 11 case will be administered before the United States Bankruptcy Court in Jacksonville. Taylor Bean also announced that the business will be directed by two newly appointed independent directors: Bill Maloney and Bruce Layman, both of whom have extensive experience in restructuring distressed businesses. This new board has appointed Neil Luria of Navigant Capital Advisors as Chief Restructuring Officer. The company's previous board and management team worked closely with the Office of Thrift Supervision to obtain expedited, conditional approval of Messrs. Maloney, Layman and Luria. "This is a very complicated business, and the speed of its collapse has been stunning," said Mr. Luria. "We are very appreciative of the efforts of the members of management and other company employees, along with a large team of professionals, who have worked tirelessly under very stressful circumstances to make today's filing possible. Much remains to be done, but we are committed to creating and realizing the value of the company's assets." About Taylor, Bean & Whitaker Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. TAYLOR BEAN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Taylor, Bean & Whitaker Mortgage Corp. 315 N.E. 14th St. Ocala, FL 34470 Bankruptcy Case No.: 09-07047 Type of Business: The Debtor is a mortgage banker. See https://www.taylorbean.com/ Chapter 11 Petition Date: August 24, 2009 Court: Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Edward J. Peterson, III, Esq. epeterson.ecf@srbp.com Stichter, Riedel, Blain & Prosser, PA 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229- 0144 Fax: (813) 229-1811 Debtor's Special Counsel: Troutman Sanders LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174-0700 Tel: (212) 704-6000 Fax: (212) 704-6288 Debtor's Claims Agent: BMC Group, Inc. 875 Third Avenue, 5th Floor New York, NY 10022 Tel: (212) 310-5900 Fax: (212) 644-4552 http://www.bmcgroup.com/ Estimated Assets: More than $1 Billion Estimated Debts: More than $1 Billion The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank Securities Inc. $42,000,000 60 Wall St., 19th Floor New York, NY 1005 James G. Hicks $9,000,000 950 Grayson Highway Lawrenceville, GA 30045 RBC Capital Markets $2,238,750 One Liberty Plaza 165 Broadway New York, NY 1006-1404 Cadwalader, Wickersham & Taft $1,468,123 General Post Office PO Box 5929 New York, NY 10087-5929 Locke Lord Bissell & Liddell LP $1,399,960 111 S. Wacker Drive Chicago, IL 60606-4410 Sam Solutions $586,208 11511 Abercon Box 285 Savannah, GA 31419 NDS USA LLC $428,575 McKenna Long & Aldridge LLP $424,333 First American Corelogic $392,063 LandAmerica Tax and Food $385,469 First National Bank of Layton $383,719 First American Real Estate Tax $286,746 Service AT&T Universal Biller $237,981 First American $235,008 Wright Express Financial $211,119 American International Company $204,832 Lamb & Browne $203,769 Hadlock Title Services Inc. $199,747 Dimension Data $184,314 Fidelity National Title $163,172 The petition was signed by Neil F. Luria, chief restructuring officer. TAYLOR CAPITAL: Fitch Downgrades Issuer Default Rating to 'B-' -------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Ratings of Taylor Capital Group and Cole Taylor Bank to 'B-' and 'B', respectively. The ratings remain on Rating Watch Negative. Fitch's downgrade of TAYC and its subsidiaries primarily reflect its scarce common equity position, increasing losses in its loan book, and a weak parent company liquidity profile. This is primarily reflected in TAYC's low ratio of tangible common equity to tangible assets which dropped to 2.5% on June 30, 2009 given continuing levels of elevated credit costs. While regulatory capital ratios incorporate the benefit of preferred issuances in third quarter-2008 (3Q'08) and 4Q'08, TAYC's common equity is considered weak, and does not provide an adequate cushion against rising loan losses, absent further capital raises. Nonperforming assets have been relatively stable over the past several quarters; however, the severity of loss increased dramatically in 2Q'09 with net charge-offs at nearly 5%. Additional losses and high loan loss provisioning needs over the near-term will further pressure the company's regulatory and other capital measures. The lower rating for the holding company relative to the bank highlights Fitch's view that the more acute challenges are present at the holding company level. With no bank dividend capacity in the foreseeable future and the potential need to downstream capital to the subsidiary, parent company finances remain weak. Underlying the rating action on the preferred level instruments, TAYC faces an increased likelihood of deferral given the potential need to downstream capital. Fitch assigns Recovery Ratings (RR) to individual security issues where the IDR of the issuer is rated in the 'B' or below category. As such, Fitch has assigned a Recovery Rating of 'RR3' to the uninsured long-term deposits of Cole Taylor Bank, which implies a recovery between 51%-70% on these instruments in the event of failure or default by the issuer, and a 'RR6' to the preferred and trust preferred securities, which implies recovery between 0%-10%. TAYC is a $4.5 billion banking company headquartered in Rosemont, IL. TAYC provides a range of traditional commercial and consumer banking services, primarily focusing on closely-held businesses in the Chicago metropolitan area. Through its subsidiary, Cole Taylor Bank, the company operates nine branches throughout the Chicago area. Fitch has downgraded these ratings, which remain on Rating Watch Negative: Taylor Capital Group, Inc. -- Long-term Issuer Default Rating to 'B-' from 'BB-'; -- Individual to 'D/E' from 'D'; -- Preferred stock to 'CC/RR6' from 'B'. Cole Taylor Bank -- Long-term IDR to 'B' from 'BB'; -- Individual to 'D' from 'C/D'; -- Long-term deposits to 'B+/RR3' from 'BB+'. TAYC Capital Trust I -- Preferred stock to 'CC/RR6' from 'B'. Fitch has placed these ratings on Rating Watch Negative: Taylor Capital Group, Inc. -- Short-term IDR 'B'. Cole Taylor Bank -- Short-term IDR 'B'. These ratings are unchanged: Taylor Capital Group, Inc. -- Support Rating '5'; -- Support Floor 'NF'. Cole Taylor Bank -- Short-term deposits 'B'; -- Support Rating '5'; -- Support Floor 'NF'. TENNECO INC: Fitch Affirms 'B-' Issuer Default Rating ----------------------------------------------------- Fitch Ratings has taken these ratings actions on certain U.S. auto suppliers: American Axle -- Issuer Default Rating is affirmed at 'CCC', removed from Rating Watch Negative and assigned a Stable Outlook; ArvinMeritor -- IDR 'CCC' remains on Rating Watch Negative; Tenneco -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook; TRW Automotive -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook. The rating action concludes the Rating Watch that was initiated on Dec. 11, 2008, due to concerns about possible bankruptcies by General Motors and Chrysler LLC; following the bankruptcies by the two automakers, the Rating Watch remained in effect due to concerns about post-bankruptcy vehicle volumes at GM and Chrysler. ArvinMeritor remains on Rating Watch Negative for separate matters. Both GM and Chrysler emerged from Chapter 11 and the extended production shutdowns are complete. Furthermore, the auto supply base has not faced serious disruptions despite some bankruptcies such as Hayes-Lemmerz International, Lear Corporation, Metaldyne Corp. and Visteon Corp. While the Rating Watch has been removed, Fitch views the global automotive environment as challenging in the near term and on a longer term basis, the suppliers should benefit from the significant restructuring actions taken before and during the global automotive slump. Fitch continues to believe that North American vehicle sales volumes will improve in the second half of 2009 versus the first half of the year. Drivers for the modest improvements against the first half are the government's 'Cash for Clunkers' program which is nearly completed; aggressive vehicle pricing; consumers' access to vehicle financing which was difficult to obtain in the early part of 2009; and a reduction in dealer inventories. With higher production volumes, auto suppliers will be using cash for working capital needs in the second half of the year, and Fitch expects most suppliers should have adequate liquidity while production ramps up. Fitch believes this to be the case given that many suppliers have amended financial covenants to ensure access to revolving credit facilities. American Axle is currently trying to obtain covenant relief as well as other modifications to its credit agreement to ensure its access to liquidity as discussed below. Looking ahead to 2010, Fitch continues to see gains in vehicle sales in North America which should enable the suppliers to gain operating efficiencies; in Europe vehicle sales are likely to decline. Fitch expects to see free cash flow to be negative for many suppliers; it may be another year in which many suppliers restrict capital expenditures. Balance sheets for the auto suppliers are likely to remain damaged for some time. American Axle Fitch has removed the 'CCC' IDR from Rating Watch Negative and assigned a Stable Outlook to American Axle. The actions are based on Fitch's expectation that the company will succeed in finalizing two key related items: 1) an agreement with GM; and 2) an amendment with lenders. Both will need to occur to ensure that the company maintains access to liquidity. If both are completed, the company will receive a one-time payment of $110 million from GM. Furthermore, GM will offer American Axle a $100 million delayed-draw second lien term loan which extends through 2013 and American Axle can also receive expedited payments through the end of 2013. In return, American Axle will offer warrants to GM which will be up to 19.9% of its common shares (7.4% initially and up to an additional 12.4% if American Axle draws on the second lien term loan); it will also agree to an access and security agreement. These two items are expected to be completed by the end of August given that American Axle has received a second extension to its waiver and amendment which extends through Aug. 31, 2009. Fitch expects that lenders would be willing to consent to modifications to the credit agreement. As of June 30, 2009, American Axle's liquidity was $285 million consisting of $284 million in cash and equivalents and $1 million of availability on its revolving credit facility. The company was not in compliance with covenants as of June 30 and as a result, it drew down nearly all of the revolver. The secured revolver provides commitments of $476.9 million through April 2010. After that, the commitment is reduced to $369.4 million and expires in December 2011. Aside from the reduction in the size of the revolver in 2010 and its final maturity in 2011, American Axle does not have any debt maturities until its $250 million term loan is due in 2012. Fitch projects that American Axle will not generate free cash flow in 2009 following the negative free cash flow of $322 million in 2008, despite significant improvement and flexibility to its fixed cost structure. Capital expenditures are expected to be $140 million - $150 million, which would be flat to slightly higher than the $140 million spent in 2008. Dividends were suspended in January 2009 and cost-cutting efforts were made before and during the global automotive slump. Additional headwinds will come from the company's need to make pension and other retirement plan contributions in 2009. At the end of 2008, American Axle's pension plan was 55% funded, or $255 million underfunded. The company expects funding requirements to be $20 million in 2009. Other post-retirement obligations are expected to require $15 million of funding. ArvinMeritor ArvinMeritor's 'CCC' rating remains on Rating Watch Negative given Fitch's view that the company continues to face significant risks in its ability to execute the divestiture of the remaining assets in the light vehicle segment which have been a significant use of cash, the potential need for an amendment for covenant relief for the quarter ending Sept. 30, 2009, and ongoing weakness in truck demand in Europe. Fitch notes that ArvinMeritor has made some progress divesting assets in the light vehicle segment but concerns remain about shedding the rest of the assets given the cash burn from the segment and the company's potential for needing an amendment. Fitch expects that operating losses and restructuring costs will produce negative cash flows in 2009. Liquidity as of June 30, 2009 was $532 million consisting of $456 million of availability on the credit facility and $76 million of cash. ArvinMeritor has indicated that it requires $75 million to $100 million of liquidity for operations, and Fitch believes that even if this estimate proves to be conservative, ArvinMeritor's liquidity should be adequate for the near term provided lenders grant covenant relief on the credit agreement, if required. ArvinMeritor has no debt maturities until the bank agreement matures in 2011 and the company's pension is moderately underfunded in dollar terms. At the end of the last measurement date (June 30, 2008), it was underfunded by $115 million (or 7%). Given the performance of the equity markets since then, Fitch expects to see the underfunded status increase, which could require incremental contributions over the next several years. Tenneco The company's IDR of 'B-' has been removed from Rating Watch Negative and a Stable Outlook has been assigned. Fitch believes that the company has appropriate covenants for the challenging automotive environment, a diverse product offering and geographic distribution. In 2008, the company received approximately 20% of its revenues from GM and 2% from Chrysler. Like other suppliers, Tenneco felt the impact of the extended production shutdowns; however, with the production restarts at the auto makers and Tenneco's restructuring efforts, profits should improve in the second half of 2009 versus the first half. Liquidity as of June 30, 2009 was $444 million consisting of $333 million of availability on its credit facility and cash of $111 million. Liquidity excludes availability on the U.S accounts receivable program as well as the European accounts receivable programs, some of which can be canceled with 30 days notice. Furthermore, Tenneco once again can use receivables from GM and Chrysler in its $100 million U.S. accounts receivable program; this facility extends through February 2010. Importantly, the company does not have any significant debt maturities until 2012 when $700 million of the $830 million of the credit facility expires. Tenneco has a $249 million underfunded pension plan, which due to losses in the equity and fixed income markets in 2008, is likely to require incremental contributions over the near term. At the end of 2008, the pension plan's funding status was 59%. TRW Automotive Fitch has affirmed the 'B-' rating and removed the Rating Watch Negative. A Stable Outlook has also been assigned. The actions reflect improved operating performance, the recent equity issuance, a credit agreement amendment, and significant liquidity. In 2008, GM and Chrysler accounted for 13.5% and 9.6%, respectively, of TRW's sales globally in 2008. TRW recently raised equity and net proceeds were $269 million, all of which was earmarked for debt reduction. One-third of the net proceeds, or $89 million, was used to reduce the term loans while the balance was used to lower borrowings on the revolving credit facility. Liquidity at the end of the recent quarter was $1,476 million consisting of $905 million of credit facility availability and $571 million of cash. In June 2009, the company's credit agreement was amended and its financial covenants were reset for the more challenging automotive environment. Despite the termination of the U.S. accounts receivables securitization facility, a net decrease in European factoring facilities, and Fitch's expectation for negative cash flow in 2009, Fitch estimates that the company's liquidity profile should be sufficient over the near term. TRW has no near-term debt maturities and the revolver extends through 2012. The company's $600 million Term Loan A has required amortization of $54 million in 2010, $120 million in 2011, $225 million in 2012 and $150 million in 2013. TRW's $500 million Term Loan B also amortizes and requires payments of $2.75 million in 2009 and $0.5 million a year until the final payment in 2014. For more details on the auto suppliers, please see Fitch's report 'Liquidity Focus: U.S. Auto Suppliers', dated June 9, 2009. Readers should note that since that publication date, TRW Automotive was downgrade by one notch as noted in the TRW Automotive press release dated June 30, 2009. Fitch affirms these ratings: American Axle & Manufacturing, Inc. -- IDR 'CCC'; -- Senior secured bank facility 'B-/RR3'; -- Senior unsecured notes 'C/RR6'; -- Outlook Stable. American Axle & Manufacturing Holdings, Inc. -- IDR 'CCC'; -- Outlook Stable. Tenneco -- IDR 'B-'; -- Senior secured bank facility 'B+/RR2'; -- Senior secured second lien notes 'CC/RR6'; -- Senior unsecured notes to 'CC/RR6'; -- Subordinated notes 'CC/RR6'; -- Outlook Stable. TRW Automotive Holdings Corp. -- IDR 'B-; -- Outlook Stable. TRW Automotive, Inc. -- IDR 'B-'; -- Secured bank facility 'B+/RR2'; -- Senior unsecured notes 'CC/RR6'; -- Outlook Stable. This rating remains on Rating Watch Negative: ArvinMeritor -- IDR 'CCC' and on Rating Watch Negative; -- Secured 'B/RR1'; -- Senior unsecured 'CC/RR5'. THELEN LLP: Settles Schiff Hardin Contract Suit for $1.12-Mil. -------------------------------------------------------------- Nate Raymond at New York Law Journal reports that Thelen LLP has agreed to a $1.12 million judgment favoring Schiff Hardin to settle a lawsuit on their sublease contract. Law Journal notes that Schiff Hardin isn't likely to see the money anytime soon, as Thelen's accounts receivable are increasingly growing stale and it still owes millions of dollars to Citigroup Inc., its secured lender. Law Journal states that the settlement also suggested Thelen's possible bankruptcy filing, which will put Schiff Hardin in competition with other unsecured creditors for what is left. Law Journal quoted Steven Blum at Blum Collins, who represents Thelen employees in class actions against the firm, as saying, "I would expect Thelen to file for bankruptcy within 89 days of any significant judgment or award. About a month from now you would expect Thelen to file for Chapter 11. That's our expectation." Schiff Hardin said in court documents that it signed a four-year agreement in 2007 with Thelen to sublease up to three floors at 900 Third Avenue, a space that had housed Brown Raysman Millstein Felder & Steiner before that firm merged with Thelen Reid & Priest in 2006. Citing Schiff Hardin, Law Journal relates that when partners at Thelen voted to dissolve the Company in December 2008, it missed its last rent payment to its landlord -- the Paramount Group Inc. -- and defaulted on its lease for the floors at 900 Third that Schiff Hardin was subleasing. Schiff Hardin, the report states, said that to keep the space, it was forced to enter into a new lease with Paramount that carried higher costs. Additional cost over those in the Thelen sublease agreement was at $1.43 million, the report says, citing Schiff Hardin, which asked the Manhattan Supreme Court to order Thelen to make up the difference. According to Law Journal, Thelen initially denied the accusations, saying that Schiff Hardin had failed to state a claim under which the court could grant relief, until the Company and Schiff Hardin agreed to settle on July 27. Schiff Hardin partner Carl Oberdier, in a letter dated August 3, asked Judicial Hearing Office Ira Gammerman to enter judgment "as soon as practicable," Law Journal reports. Law Journal relates that the court entered judgment on August 18. Law Journal notes that by obtaining a judgment, Schiff Hardin was able to fix the dollar amount of its claim before Thelen files for bankruptcy, but still remains an unsecured creditor. Peter Gilhuly at Latham & Watkins advises Thelen in its wind-down, Law Journal reports. Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bicoastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. THOMAS ACI: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Thomas M. Aci 25063 Shady Glen Court Stevenson Ranch, CA 91381 Bankruptcy Case No.: 09-20839 Chapter 11 Petition Date: August 21, 2009 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Louis J. Esbin, Esq. 27201 Tourney Rd., Suite 122 Valencia, CA 91355-1804 Tel: (661) 254-5050 Fax: (661) 254-5252 Email: Esbinlaw@sbcglobal.net Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A full-text copy of Mr. Aci's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb09-20839.pdf The petition was signed by Mr. Aci. TIPJOY INC: Won't Pursue Funding, Shuts Down Operations ------------------------------------------------------- Ty McMahan posted at The Wall Street Journal blog Venture Capital Dispatch that Tipjoy Inc. said that it is shutting down its operation. Tipjoy CEO Abby Kirigin said on the Company Web site that the Company decided against pursuing additional funding. The Dispatch quoted Ms. Kirigin as saying, "After a long and hard look at the market and the situation, we didn't feel it made sense." According to The Dispatch, Betaworks led Tipjoy's $1 million Series A funding with participation from David Shen Ventures LLC, Accelerator Group, and individual investors that included former Google Inc. executive Chris Sacca. The Dispatch states that Tipjoy users can still log in, cash out funds, and download their transaction history, but other functionality is turned off. Tipjoy Inc. is based in Cambridge, Massachusetts. It was launched early in 2008 to become the Internet's tip jar for digital content. Tipjoy creates an easy way for consumers to give money for good digital content. Users add a Tipjoy widget to their site, which enabled consumers of that content to contribute money. Tipjoy took a 3% cut of the payment amount. TISHMAN SPEYER: S&P Downgrades Corporate Credit Rating to 'D' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Tishman Speyer Real Estate D.C. Area Portfolio L.P. to 'D' from 'CCC'. At the same time, S&P lowered all other TSDC- related credit ratings, affecting $570 million in secured debt. S&P's '4' recovery rating on the secured debt remains unchanged. "The rating actions reflect TSDC's failure to pay interest due on July 22, 2009, and its subsequent failure to cure the payment default within the permitted grace period," said Standard & Poor's credit analyst Linda Phelps. Although no formal forbearance agreement is currently in place, the lenders have not demanded payment of the principal balance as a result of the interest payment default; negotiations to modify the current credit agreement, as part of a near-term recapitalization plan, continue. In particular, S&P believes the partnership's ability to comply with current financial covenants beyond the end of 2009 is in jeopardy. In S&P's view, a meaningful infusion of additional equity capital into the partnership will be necessary as part of the recapitalization. TRIBUNE CO: Sale to Rickets to Net $740MM Cash + 5% Stake in Cubs ----------------------------------------------------------------- Tribune Co. and a non-debtor affiliate submitted before the Bankruptcy Court a motion to sell the Chicago Cubs baseball team to the family of TD Ameritrade Holding Corp. founder Joe Ricketts, saying the sale will bring $740 million in cash to creditors. The National League Ball Club, LLC, Tribune's non-debtor affiliate directly owning the Cubs, will file for Chapter 11 as soon as the Bankruptcy Court approves Tribune's proposal and in order to effectuate the sale. The filing follows last week's announcement that the more-than 100-year-old team would be bought by the Rickets for $845 million. According to the Court filing, the parties have agreed that the Cubs has enterprise value of $844,7400,000. However, after adjustments are made, Tribune will receive $740 million in cash, plus a 5% stake in the Cubs. The money and the Cubs stake would be used to repay creditors owed as much as $13 billion. The specific assets comprising the Cubs Business are extensive, but include in material part: (i) the Chicago Cubs Major League Baseball franchise; (ii) Wrigley Field; (iii) the 25.34% interest in CSN Chicago currently owned directly by Tribune Sports Network Holdings, LLC, one of the Cubs Entities, and indirectly owned by Tribune; (iv) various parcels of real property owned by the Cubs Entities located on the north side of Chicago near Wrigley Field (including the so-called "Triangle Property"), most of which consist of parking lots used for game-day parking for Cubs baseball games; (v) intellectual property owned by the Cubs Entities; (vi) certain partial ownership interests in various entities that in large part comprise the business of Major League Baseball; (vii) all goodwill relating to the Cubs Business; (viii) accounts receivable other than those specifically being retained by the Cubs Entities; and (ix) other day-to-day assets used by the Cubs Entities in operating the Cubs Business. Tribune acknowledges that the transfer of the Cubs team requires approval by Major League Baseball, an unincorporated association of 30 member clubs in North America. Any proposed relocation or ownership transfer of a MLB club (other than certain intra-family ownership transfers, which require the approval of a majority of all MLB clubs) requires the approval of three-quarters of all MLB clubs. Tribune has submitted the proposed sale for review and approval to MLB and hopes that such approval will be obtained prior to the sale hearing. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP, represent the Official Committee of Unsecured Creditors. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: Stipulation Resolving Dunn-Edwards Pact Dispute ----------------------------------------------------------- Debtor Tronox LLC and Dunn-Edwards Corporation are parties to a TiO2 Pigment Supply Agreement dated June 1, 2006. The Parties had a dispute arising from or related to the Supply Contract. Dunn-Edwards took certain actions in respect of the Supply Contract. Tronox advised Dunn-Edwards that, absent approval by the Court, it considered Dunn-Edwards' acts to be in violation of the automatic stay under Section 362 of the Bankruptcy Code. Dunn-Edwards advised Tronox that it would soon be filing a motion with the Court in respect of the Dispute and asked the opportunity to meet and confer prior to the filing. Counsel for the Parties conferred, discussed the Parties' respective positions, and agreed that the filing of a motion should be deferred for a short period of time to allow business representatives from the Parties to attempt to resolve the Dispute consensually. In light of the time, uncertainty and cost of litigation, the parties opt to settle and compromise the Dispute and modify the Supply Contract. Accordingly, the parties entered into a stipulation agreeing to modify the provisions of the Supply Contract. The parties agree that the modification of the Supply Contract will not constitute or be deemed to constitute an assumption of the Supply Contract, and that Tronox expressly reserves all rights to assume or reject the Supply Contract. The Supply Contract, however, will only be assumed or rejected subject to the Amendment to which the Stipulation relates. Without limiting any other rights or remedies of Dunn-Edwards, in the event that Dunn-Edwards is able to prove a breach of Tronox's obligation to supply the required quantities of TiO2, any damages awarded Dunn-Edwards arising from or relating to the breach by Tronox in respect of a purchase order issued by Dunn-Edwards and accepted by Tronox will be deemed an administrative expense under Section 503(b)(1) without regard to whether the Supply Contract, as amended, is assumed or rejected by Tronox. No party-in- interest will have the right to object to, subordinate, reclassify, challenge or reconsider any administrative expense claim allowed. The modifications to the Supply Contract are confidential and are not attached to the Stipulation. Terms of the settlement were shared with the Court, the U.S. Trustee, advisors to Tronox's secured lenders, advisors to the Creditors' Committee and counsel to the Equity Committee. The Parties ask the Court to approve the Stipulation. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRW AUTOMOTIVE: Fitch Affirms 'B-' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has taken these ratings actions on certain U.S. auto suppliers: American Axle -- Issuer Default Rating is affirmed at 'CCC', removed from Rating Watch Negative and assigned a Stable Outlook; ArvinMeritor -- IDR 'CCC' remains on Rating Watch Negative; Tenneco -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook; TRW Automotive -- IDR is affirmed at 'B-', removed from Rating Watch Negative and assigned a Stable Outlook. The rating action concludes the Rating Watch that was initiated on Dec. 11, 2008, due to concerns about possible bankruptcies by General Motors and Chrysler LLC; following the bankruptcies by the two automakers, the Rating Watch remained in effect due to concerns about post-bankruptcy vehicle volumes at GM and Chrysler. ArvinMeritor remains on Rating Watch Negative for separate matters. Both GM and Chrysler emerged from Chapter 11 and the extended production shutdowns are complete. Furthermore, the auto supply base has not faced serious disruptions despite some bankruptcies such as Hayes-Lemmerz International, Lear Corporation, Metaldyne Corp. and Visteon Corp. While the Rating Watch has been removed, Fitch views the global automotive environment as challenging in the near term and on a longer term basis, the suppliers should benefit from the significant restructuring actions taken before and during the global automotive slump. Fitch continues to believe that North American vehicle sales volumes will improve in the second half of 2009 versus the first half of the year. Drivers for the modest improvements against the first half are the government's 'Cash for Clunkers' program which is nearly completed; aggressive vehicle pricing; consumers' access to vehicle financing which was difficult to obtain in the early part of 2009; and a reduction in dealer inventories. With higher production volumes, auto suppliers will be using cash for working capital needs in the second half of the year, and Fitch expects most suppliers should have adequate liquidity while production ramps up. Fitch believes this to be the case given that many suppliers have amended financial covenants to ensure access to revolving credit facilities. American Axle is currently trying to obtain covenant relief as well as other modifications to its credit agreement to ensure its access to liquidity as discussed below. Looking ahead to 2010, Fitch continues to see gains in vehicle sales in North America which should enable the suppliers to gain operating efficiencies; in Europe vehicle sales are likely to decline. Fitch expects to see free cash flow to be negative for many suppliers; it may be another year in which many suppliers restrict capital expenditures. Balance sheets for the auto suppliers are likely to remain damaged for some time. American Axle Fitch has removed the 'CCC' IDR from Rating Watch Negative and assigned a Stable Outlook to American Axle. The actions are based on Fitch's expectation that the company will succeed in finalizing two key related items: 1) an agreement with GM; and 2) an amendment with lenders. Both will need to occur to ensure that the company maintains access to liquidity. If both are completed, the company will receive a one-time payment of $110 million from GM. Furthermore, GM will offer American Axle a $100 million delayed-draw second lien term loan which extends through 2013 and American Axle can also receive expedited payments through the end of 2013. In return, American Axle will offer warrants to GM which will be up to 19.9% of its common shares (7.4% initially and up to an additional 12.4% if American Axle draws on the second lien term loan); it will also agree to an access and security agreement. These two items are expected to be completed by the end of August given that American Axle has received a second extension to its waiver and amendment which extends through Aug. 31, 2009. Fitch expects that lenders would be willing to consent to modifications to the credit agreement. As of June 30, 2009, American Axle's liquidity was $285 million consisting of $284 million in cash and equivalents and $1 million of availability on its revolving credit facility. The company was not in compliance with covenants as of June 30 and as a result, it drew down nearly all of the revolver. The secured revolver provides commitments of $476.9 million through April 2010. After that, the commitment is reduced to $369.4 million and expires in December 2011. Aside from the reduction in the size of the revolver in 2010 and its final maturity in 2011, American Axle does not have any debt maturities until its $250 million term loan is due in 2012. Fitch projects that American Axle will not generate free cash flow in 2009 following the negative free cash flow of $322 million in 2008, despite significant improvement and flexibility to its fixed cost structure. Capital expenditures are expected to be $140 million - $150 million, which would be flat to slightly higher than the $140 million spent in 2008. Dividends were suspended in January 2009 and cost-cutting efforts were made before and during the global automotive slump. Additional headwinds will come from the company's need to make pension and other retirement plan contributions in 2009. At the end of 2008, American Axle's pension plan was 55% funded, or $255 million underfunded. The company expects funding requirements to be $20 million in 2009. Other post-retirement obligations are expected to require $15 million of funding. ArvinMeritor ArvinMeritor's 'CCC' rating remains on Rating Watch Negative given Fitch's view that the company continues to face significant risks in its ability to execute the divestiture of the remaining assets in the light vehicle segment which have been a significant use of cash, the potential need for an amendment for covenant relief for the quarter ending Sept. 30, 2009, and ongoing weakness in truck demand in Europe. Fitch notes that ArvinMeritor has made some progress divesting assets in the light vehicle segment but concerns remain about shedding the rest of the assets given the cash burn from the segment and the company's potential for needing an amendment. Fitch expects that operating losses and restructuring costs will produce negative cash flows in 2009. Liquidity as of June 30, 2009 was $532 million consisting of $456 million of availability on the credit facility and $76 million of cash. ArvinMeritor has indicated that it requires $75 million to $100 million of liquidity for operations, and Fitch believes that even if this estimate proves to be conservative, ArvinMeritor's liquidity should be adequate for the near term provided lenders grant covenant relief on the credit agreement, if required. ArvinMeritor has no debt maturities until the bank agreement matures in 2011 and the company's pension is moderately underfunded in dollar terms. At the end of the last measurement date (June 30, 2008), it was underfunded by $115 million (or 7%). Given the performance of the equity markets since then, Fitch expects to see the underfunded status increase, which could require incremental contributions over the next several years. Tenneco The company's IDR of 'B-' has been removed from Rating Watch Negative and a Stable Outlook has been assigned. Fitch believes that the company has appropriate covenants for the challenging automotive environment, a diverse product offering and geographic distribution. In 2008, the company received approximately 20% of its revenues from GM and 2% from Chrysler. Like other suppliers, Tenneco felt the impact of the extended production shutdowns; however, with the production restarts at the auto makers and Tenneco's restructuring efforts, profits should improve in the second half of 2009 versus the first half. Liquidity as of June 30, 2009 was $444 million consisting of $333 million of availability on its credit facility and cash of $111 million. Liquidity excludes availability on the U.S accounts receivable program as well as the European accounts receivable programs, some of which can be canceled with 30 days notice. Furthermore, Tenneco once again can use receivables from GM and Chrysler in its $100 million U.S. accounts receivable program; this facility extends through February 2010. Importantly, the company does not have any significant debt maturities until 2012 when $700 million of the $830 million of the credit facility expires. Tenneco has a $249 million underfunded pension plan, which due to losses in the equity and fixed income markets in 2008, is likely to require incremental contributions over the near term. At the end of 2008, the pension plan's funding status was 59%. TRW Automotive Fitch has affirmed the 'B-' rating and removed the Rating Watch Negative. A Stable Outlook has also been assigned. The actions reflect improved operating performance, the recent equity issuance, a credit agreement amendment, and significant liquidity. In 2008, GM and Chrysler accounted for 13.5% and 9.6%, respectively, of TRW's sales globally in 2008. TRW recently raised equity and net proceeds were $269 million, all of which was earmarked for debt reduction. One-third of the net proceeds, or $89 million, was used to reduce the term loans while the balance was used to lower borrowings on the revolving credit facility. Liquidity at the end of the recent quarter was $1,476 million consisting of $905 million of credit facility availability and $571 million of cash. In June 2009, the company's credit agreement was amended and its financial covenants were reset for the more challenging automotive environment. Despite the termination of the U.S. accounts receivables securitization facility, a net decrease in European factoring facilities, and Fitch's expectation for negative cash flow in 2009, Fitch estimates that the company's liquidity profile should be sufficient over the near term. TRW has no near-term debt maturities and the revolver extends through 2012. The company's $600 million Term Loan A has required amortization of $54 million in 2010, $120 million in 2011, $225 million in 2012 and $150 million in 2013. TRW's $500 million Term Loan B also amortizes and requires payments of $2.75 million in 2009 and $0.5 million a year until the final payment in 2014. For more details on the auto suppliers, please see Fitch's report 'Liquidity Focus: U.S. Auto Suppliers', dated June 9, 2009. Readers should note that since that publication date, TRW Automotive was downgrade by one notch as noted in the TRW Automotive press release dated June 30, 2009. Fitch affirms these ratings: American Axle & Manufacturing, Inc. -- IDR 'CCC'; -- Senior secured bank facility 'B-/RR3'; -- Senior unsecured notes 'C/RR6'; -- Outlook Stable. American Axle & Manufacturing Holdings, Inc. -- IDR 'CCC'; -- Outlook Stable. Tenneco -- IDR 'B-'; -- Senior secured bank facility 'B+/RR2'; -- Senior secured second lien notes 'CC/RR6'; -- Senior unsecured notes to 'CC/RR6'; -- Subordinated notes 'CC/RR6'; -- Outlook Stable. TRW Automotive Holdings Corp. -- IDR 'B-; -- Outlook Stable. TRW Automotive, Inc. -- IDR 'B-'; -- Secured bank facility 'B+/RR2'; -- Senior unsecured notes 'CC/RR6'; -- Outlook Stable. This rating remains on Rating Watch Negative: ArvinMeritor -- IDR 'CCC' and on Rating Watch Negative; -- Secured 'B/RR1'; -- Senior unsecured 'CC/RR5'. VALCOM INC: Posts $584,783 Net Loss in Nine Months Ended June 30 ---------------------------------------------------------------- ValCom, Inc., posted a net loss of $346,476 for three months ended June 30, 2009, compared with a net loss of $141,208 for the same period in 2008. For nine months ended June 30, 2009, the Company posted a net loss of $584,783 compared with a net loss of $501,161 for the same period in 2008. The Company's balance sheet showed total assets of $2.31 million, total liabilities of $1.87 million and stockholders' equity of $441,494. The Company said that it has a negative cash flow from operations of $463,267 for the nine months ended June 30, 2009, a working capital deficiency of $1,427,191 and an accumulated deficit of $18,317,889 at June 30, 2009. The Company added that its ability to continue as a going concern is dependent upon its ability to successfully accomplish the plan. A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?42d8 About Valcom As of September 30, 2008, ValCom, Inc., had five subsidiaries: (1) Valencia Entertainment International, LLC; (2) Half Day Video, Inc.; (3) ValCom Studios, Inc. (80% Equity Interest); (4) New Zoo Revue LLC (50% Interest); (5) ValCom Broadcasting, LLC (45% Equity Interest). The company is a diversified entertainment company with four divisions: studio rental, film production division, live theatre division, TV stations and broadcasting. The company filed a voluntary petition for reorganization under Chapter 11 on July 16, 2007 (Bankr. C.D. Calif. Case No. 07- 15984). Joseph L. Pittera, Esq., represented the Debtor in its restructuring efforts. The Hon. Ernest M. Robles of the United States Bankruptcy Court for the Central District of California confirmed a second amended Chapter 11 plan of liquidation filed by Valcom Inc. on June 14, 2008. The company emerged from bankruptcy on August 5, 2008. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 21, 2009, Moore & Associates Chartered, in Las Vegas, Nevada expressed substantial doubt about the Company's ability to continue as a going concern after auditing the consolidated balance sheets of Valcom, Inc., as of Sept. 30, 2008, and 2007, and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended. The firm pointed out that the Company has incurred significant annual losses, which have resulted in an accumulated deficit of $17,733,106 at Sept. 30, 2008, which raises substantial doubt about its ability to continue as a going concern. VELOCITY EXPRESS: Management Group Scraps Recapitalization Deal --------------------------------------------------------------- Velocity Express Corporation on August 14, 2009, received from MCG Acquisition LLC, a notice terminating the Recapitalization Agreement, dated as of July 31, 2009, among the Company, Newco and certain Preferred Stockholders of the Company. The termination of the Recapitalization Agreement is effective August 14, 2009, and did not result in the incurrence by the Company of any early termination penalties. Newco is an entity formed by a management buyout group led by Vincent A. Wasik, Chief Executive Officer of the Company and his private equity firm, MCG Global, LLC. As reported by the Troubled Company Reporter on August 7, 2009, the Recapitalization Agreement provided for a series of issuances of shares of Common Stock of the Company in exchange for (i) delivery by Newco of certain of the Company's Senior Secured Notes and related warrants and (ii) delivery of all series of Preferred Stock of the Company such that, post-transaction, ownership of the Company would be as follows (on a fully diluted basis but subject to possible adjustments for certain outstanding options and warrants): (a) 68.5% of the Common Stock of the Company would be held by the Management Group and its financing source; (b) 10.0% of the Common Stock of the Company would be held by the current Note holders; (c) 19.9% of the Common Stock of the Company would be held by the holders of all series of the Company's outstanding Preferred Stock; and (d) 1.6% of the Common Stock of the Company would be retained by existing Common Stockholders and certain option or warrant holders. The transactions contemplated by the Recapitalization Agreement were subject to a number of conditions, including but not limited to financing, closing of purchases by Newco of sufficient Senior Secured Notes of the Company to effect the transactions contemplated by the Recapitalization Agreement, consent of the Company's senior secured lender and consent or reaffirmation of consent to the transactions contemplated by the Recapitalization Agreement of the Company's Preferred Stockholders. Newco's termination notice indicated that Newco had not obtained the necessary consents or reaffirmations of the Company's Preferred Stockholders. The Recapitalization Agreement permits Newco to terminate the agreement prior to obtaining the requisite number of Preferred Stockholder consents or reaffirmations. A full-text copy of the Recapitalization Agreement is available at no charge at http://ResearchArchives.com/t/s?40f3 About Velocity Express Headquartered in Westport, Connecticut, Velocity Express Corporation (NASDAQ:VEXP) -- http://www.velocityexp.com/-- together with its subsidiaries, is engaged in the business of providing time definite ground package delivery services. The Company operates in the United States with limited operations in Canada. Its customers comprised of multi-location, blue chip customers with operations in the healthcare, commercial and office products, financial, transportation and logistics, technology and energy sectors. On July 2, 2009, the Company received a letter from Burdale Capital Finance, the Company's senior secured lender pursuant to a Loan and Security Agreement for a revolving line of credit dated as of March 13, 2009, notifying the Company of defaults relating to the Company's minimum fixed charge coverage ratio, minimum liquidity, delivery of timely financial information, and failure to make the June 30, 2009 interest payment due to the holders of the Senior Notes. Burdale stated that it is not currently exercising any of the rights and remedies available to it under the Loan Agreement by reason of such defaults, but that it and reserved all of its rights to take action with respect to such defaults in the future. X-RITE INC: Has Deal to Reduce 2nd Lien Debt by $41.6 Million ------------------------------------------------------------- X-Rite, Incorporated, on August 18, 2009, entered into a series of transactions whereby X-Rite issued preferred stock and warrants to purchase common stock to existing shareholders OEPX, LLC, Sagard Capital Partners, L.P., and Tinicum Capital Partners II, L.P., in exchange for the cancellation of $41.6 million of second-lien loans. The existing shareholders had, contemporaneously with the exchange transactions, acquired the second-lien loans from one of the second lien lenders. The exchange transactions result in the reduction of the principal amount of the Company's first and second lien debt by $41.6 million to $195.1 million. Key terms of the deal include the issuance of nonconvertible preferred stock, with an aggregate liquidation preference of $41.6 million, and warrants to purchase common stock, to affiliates of One Equity Partners, Sagard and Tinicum. Dividends on the nonconvertible preferred stock will accrue at 14.375% per annum and may be paid "in kind" through the issuance of additional shares of nonconvertible preferred stock, or in cash, at X-Rite's option. The Company may redeem the preferred shares anytime after February 18, 2010 and before January 24, 2014. As a part of the transactions, X-Rite also issued warrants to acquire 7.5 million shares of common stock, which will be exercisable upon receipt of shareholder approval. The warrants have an exercise price of $0.01 per share with a 10 year term. Specifically, the Investors acquired (i) an aggregate of 41,561.22312 shares of newly designated Series A Preferred Stock, par value $0.10 per share, which -- (x) unless and until Shareholder Approval is obtained by the Company with respect to the issuance of the Warrant Shares or (y) unless, prior to such Shareholder Approval, there is a Liquidation Event or any event requiring the Company to redeem, repurchase, or offer to repurchase the Series A Preferred Stock in accordance with the Certificate of Designation -- entitle the holders to receive a Participation Amount upon the redemption or repurchase of the Series A Preferred Stock, which amount is, at the option of the Company, payable in cash or, provided certain conditions are met, payable by delivery of an aggregate of 7,500,000 shares of Common Stock, subject to adjustment as set forth in the Certificate of Designation and (ii) warrants to acquire an aggregate of 7,500,000 shares of Common Stock, subject to adjustment as set forth in the Warrants, which Warrants will not become exercisable unless and until Shareholder Approval is obtained, in exchange for the cancellation of $41,561,223.12 of the principal amount of the Company's second lien debt. In addition to the shares of Series A Preferred Stock acquired by the Investors on August 18, 2009, the Certificate of Designation authorizes the Company to issue an additional 43,168.0405 shares of Series A Preferred Stock for the payment of dividends "in kind" on the Series A Preferred Stock in accordance with the Certificate of Designation. Pursuant to the terms of the Series A Preferred Stock under the Certificate of Designation, following a redemption or repurchase of the Series A Preferred Stock entirely in cash which redemption or repurchase occurs at any time when Shareholder Approval has not been obtained, the holders of the Series A Preferred Stock so redeemed or repurchased may purchase from other shareholders of the Company the number of shares of Common Stock equal to the number of Redemption Shares that such holder would have been entitled to had the Participation Amount been satisfied by delivery of the Redemption Shares. In connection with the execution of the Exchange Agreement, the Warrants and the other agreements contemplated thereby, on August 18, 2009, the Company entered into Amendment No. 2 to the Shareholder Protection Rights Agreement, dated as of March 29, 2002, between the Company and Computershare Trust Company, N.A. (formerly known as EquiServe Trust Company, N.A.), as previously amended by Amendment No. 1 to Shareholder Protection Rights Plan, dated as of August 20, 2008, between the same parties, for the purpose of amending the Rights Agreement to render it inapplicable to the transactions contemplated by the Exchange Agreement and the transactions contemplated thereby. In particular the, Amendment provides that no Investor or its affiliates will be deemed to be an Acquiring Person (as defined in the Rights Agreement) and no distribution of rights will occur solely by virtue of the approval, execution, delivery, adoption or performance of the Exchange Agreement, the Certificate of Designation, the Warrants or the Investment Agreements (as defined in the Exchange Agreement) or the consummation of any transactions contemplated thereby, including, without limitation, by reason of (i) acquisitions by any Investor of Series A Preferred Stock, Warrants, Investor Shares or In Kind Dividends, (ii) acquisitions of Common Stock contemplated by the Investment Agreements (including, for the avoidance of doubt, acquisitions permitted by Section 4.1(e)(iii) thereof) or (iii) the shares of Common Stock presently beneficially owned by the Investors and their respective affiliates as of August 18, 2009. Bradley J. Freiburger, Interim Chief Financial Officer for X-Rite, commented "While we are making significant progress with our profit improvement actions, the announced transactions create the potential for incremental cash flow going forward due to reduced cash interest requirements, and provide an enhanced cushion with respect to our financial covenants." Thomas J. Vacchiano Jr., X-Rite's Chief Executive Officer, said "We are pleased that X-Rite could further strengthen its capital structure given the lack of clarity around the timing and breadth of a market recovery. This action is expected to benefit all stakeholders of X-Rite." Mr. Vacchiano went on to say, "The Company will continue to increase its attention on improving the performance of the core business and executing the profit improvement plans announced earlier this year." In a letter to employees, Mr. Vacchiano said the set of transactions will strengthen the Company's capital structure and provide greater financial security for X-Rite in the uncertain economic times. "Fundamentally we have replaced $41.6 million of second lien debt with nonconvertible preferred stock. This exchange provides certain benefits to X-Rite including a more comfortable performance cushion when compared to our lender covenants," he said. "This action does not reduce the continuing efforts we all need to make in X-Rite to deliver exceptional value to our customers and markets, which will ultimately lead to greater sales and profit growth," Mr. Vacchiano added. RBC Capital Markets acted as an independent financial advisor to X-Rite with regard to the exchange transactions. The Company will hold a special meeting of shareholders to obtain the approval necessary to permit One Equity Partners, Sagard and Tinicum to exercise their respective warrants. The Company will file a proxy statement and other relevant documents concerning the proposed transaction with the Securities and Exchange Commission. Investors and security holders are urged to read the proxy statement when it becomes available because it will contain important information about the proposal to authorize the exercise of the warrants. Investors and security holders will have access to free copies of the proxy statement (when available) and other documents filed by X-Rite with the SEC through the SEC's Web site at http://www.sec.gov/ In addition, the proxy statement and related materials (when available) may also be obtained free of charge from the Company by directing such requests to X-Rite, Incorporated, Attention: Bradley J. Freiburger, Interim Chief Financial Officer, 4300 44th Street S.E., Grand Rapids, Michigan 49512, Telephone: (616) 803-2143. On August 11, 2009, the Company reported net loss of $7.6 million for the second quarter ended July 4, 2009, versus a loss of $20.9 million in the same period in 2008. The Company reported second quarter 2009 net sales of $49.4 million compared to $73.5 million in second quarter 2008. As of July 4, 2009, the Company had $494.5 million in total assets and $40.9 million in total current liabilities and $256.4 million in total long-term liabilities. A copy of the quarterly report is available at no charge at http://ResearchArchives.com/t/s?42eb The Company has completed its announced closure of business operations for Viptronic, a subsidiary of X-Rite located in Brixen, Italy as of June 2009. It is expected that the sale of the campus will be completed by September of this year at a price estimated to be $2.4 million. About X-Rite Based in Grand Rapids, Michigan, X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/-- is the global leader in color science and technology. The Company, which now includes color industry leader Pantone, Inc., develops, manufactures, markets and supports innovative color solutions through measurement systems, software, color standards and services. X-Rite's expertise in inspiring, selecting, measuring, formulating, communicating and matching color helps users get color right the first time and every time, which translates to better quality and reduced costs. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical. VIEW SYSTEMS: Balance Sheet Upside-Down by $225,969 as of June 30 ----------------------------------------------------------------- View Systems, Inc.'s balance sheet at June 30, 2009, showed total assets of $1,465,633 against total debts of $1,691,602, resulting to a stockholders' deficit of $225,969. The Company recorded $894,572 net loss on $175,052 of revenues during the six months ended June 30, 2009, compared with $42,194 of net income on $754,572 of revenues during the same period in 2008. "Annually our revenues from product sales have been decreasing and are not sufficient to cover our operating expenses. Our auditors have expressed substantial doubt that we can continue as a going concern. We are continuing to push sales and control costs," the Company said in its filing with the Securities and Exchange Commission. A copy of the Company's second quarter report on Form 10-Q is available for free at http://researcharchives.com/t/s?42ef First Quarter Results The Company amended Form 10-Q for the period ended March 31, 2009, to (i) correct its disclosure of the number of shares outstanding on its Form 10-Q's cover page to reflect the number of shares outstanding as of the most recent practicable date, (ii) amplified Item 2's description of business activities with other companies, (iii) update the Liquidity and Capital Resources section of Item 2 to use the statement of cash flows in analyzing the Company's liquidity, specifically dealing with cash flows from investing and financing activities as well as from operations, (iv) include additional risk factors, (v) attach exhibits, and (vi) update the Signature Page to reflect the accurate date this amended Form 10-Q is filed. The Company's balance sheet at March 31, 2009, showed total assets of $1.51 million and total liabilities of $1.73 million, resulting in a stockholders' deficit of $226,419. For three months ended March 31, 2009, the Company posted a net loss of $481,922 compared with a net loss of $65,942 for the same period in 2008. The Company said its retained deficit was $21.24 million at March 31, 2009. The Company was unable to fund its day-to-day operations through revenues alone and management believes it will incur operating losses for the near future while it expands its sales channels. A full-text copy of the Company's Form 10-Q/A for the first quarter of 2009 is available for free at http://ResearchArchives.com/t/s?42d4 Going Concern Doubt On March 25, 2009, Davis, Sita & Company, P.A. in Greenbelt, Maryland expressed substantial doubt about View Systems, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended Dec. 31, 2008, and 2007. The auditors noted that the Company has incurred ongoing operating losses and does not currently have financing commitments in place to meet expected cash requirements. In addition, certain notes payable have come due and the note holders have demanded payment. About View Systems, Inc. View Systems, Inc. (OTC:VSYM) develops, produces and markets computer software and hardware systems for security and surveillance applications. The Company's product lines are related to visual surveillance, intrusion detection and physical security. View Systems principal products include ViewScan Concealed Weapons Detection System, Visual First Responder and ViewMaxx Digital Video products. WASHINGTON MUTUAL: Noteholders Group May Be Forced to Reveal Names ------------------------------------------------------------------ An ad hoc group of holders of notes issued by Washington Mutual Inc. may be forced by the Bankruptcy Court to reveal the names of its members, Steven Church at Bloomberg News reported. Judge Mary Walrath said she will issue a written ruling on a request by JPMorgan Chase & Co. that the noteholders reveal the membership as well as any purchases or sales of WaMu's unsecured notes since the case began. As reported by the TCR on August 10, 2009, JPMorgan Chase noted that the Washington Mutual Noteholders Group claimed in a pleading filed with the Court that it "collectively holds at least $3.3 billion in face amount of outstanding debt securities" issued by WaMU and they are collectively "the principal stakeholders in the Chapter 11 proceedings." JPMorgan pointed out that when the Noteholders Group first appeared in the case, it constituted 23 entities holding an aggregate of more than $1.1 billion in face amount of notes, according to a verified statement under F.R.B.P. Rule 2019 filed by White & Case LLP on October 20, 2008. A second firm -- Kasowitz, Benson, Torrest & Friedman LLP -- appeared on the case on behalf of the Noteholders Group, but has not filed a verified statement. "Tellingly, the Washington Mutual Noteholders Group has provided no explanation of how its holdings increased threefold over the period of eight months," JPM points out. JPM asserts that the Noteholders Group itself must satisfy the disclosure obligations under Bankruptcy Rule 2019. The Noteholders Group, JPM notes, has taken an active role in the Chapter 11 cases and, by its own assertions, expects to be the primary recipient of any distributions from the Debtors' estates. Yet, the identity and composition of the Group remains unknown to the Court, Debtors, JPM and the balance of the Debtors' creditor constituencies. JPM asserts that without these disclosures required by Bankruptcy Rule 2019, the Court should refuse to allow the Noteholders Group to participate in the cases. Key Lawsuits Among Parties Washington Mutual filed a suit in March against the FDIC before the U.S. District Court in Washington after its claim in the bank receivership was denied. The Debtor seeks to recover $6.5 billion in capital contributions, $4 billion in preferred securities and $3 billion in tax refunds. The lawsuit contends the FDIC sold the bank for substantially less than the assets were worth. The holding company believes the bank's assets were worth more than the bank's debt. In April 2009, JPMorgan, which acquired Washington Mutual Bank, filed in the Bankruptcy Court a complaint against Washington Mutual and WMI Investment Corp., and Federal Deposit Insurance Corporation, seeking (i) to ensure that it is not divested of the assets and interests purchased in good faith from the FDIC, as receiver for WMB; and (ii) for indemnification and recovery against the Debtors for certain liabilities that may be asserted against JPMorgan, as successor by merger to WMB, pursuant to a Purchase and Assumption Agreement dated September 25, 2008, with the FDIC. In mid-April 2009, Washington Mutual countered with its own lawsuit against JPM in the Bankruptcy Court, seeking recovery of $4 billion it was holding in deposit accounts at its bank unit when the thrift unit was taken over in September by the FDIC and immediately transferred to JPMorgan Chase & Co. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WINDSOR CENTURY: Meeting of Creditors Scheduled for September 8 --------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Windsor Century Plaza, LLC's Chapter 11 case on Sept. 8, 2009, at 4:00 p.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Phoenix, Arizona-based Windsor Century Plaza, LLC, operates a real estate business. The Company filed for Chapter 11 on Aug. 5, 2009 (Bankr. D. Ariz. Case No. 09-18571). Michael W. Carmel, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed total assets of $19,000,000 and total debts of $45,465,186. WILLIAM BLINCOE: Meeting of Creditors Scheduled for September 1 --------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in William P. Blincoe, III's Chapter 11 case on Sept. 1, 2009, at 10:00 a.m. The meeting will be held at Commerce Bldg., 222 West Oglethorpe Ave., Rm. 304, Savannah, Georgia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Boca Grande, Florida-based William P. Blincoe, III, filed for Chapter 11 on Aug. 4, 2009 (Bankr. S. D. Ga. Case No. 09-41691). C. James McCallar Jr., Esq., at McCallar Law Firm represents the Debtor in his restructuring efforts. In his petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. * Kathryn Coleman Joins Hughes Hubbard as Partner ------------------------------------------------- Kathryn Coleman has joined Hughes Hubbard as a partner in its New York office. She joins the firm from Gibson, Dunn & Crutcher LLP where she practiced for more than 20 years, leading the San Francisco office from 2000-2005 and serving most recently as a partner in the New York office. Also joining Hughes Hubbard is Gibson Dunn counsel Eric Fromme, an accomplished federal-court litigator and corporate reorganization lawyer. The two are the latest additions to Hughes Hubbard's growing bankruptcy and corporate reorganization practice, which has doubled within the last year to 25 experienced insolvency lawyers. In October, the firm acquired the New York bankruptcy, creditors rights and finance firm Luskin, Stern & Eisler. Ms. Coleman has extensive experience representing Chapter 11 debtors in possession, creditors' committees, secured lenders groups, acquirers of distressed assets in and out of bankruptcy court, and equity stakeholders in connection with troubled investments and portfolio companies. She is particularly known for her work as lead counsel to Scotia Pacific in its highly contentious Chapter 11 case, which was one of the first cases to be directly certified to the Circuit Court of Appeals from the Bankruptcy Court and set a number of important precedents. Ms. Coleman was recently named one of the 100 "Most Influential Women in Business" by the San Francisco Business Times and is ranked by Best Lawyers in America as a leading bankruptcy and creditor-debtor rights lawyer. Richard Stern, co-chair of Hughes Hubbard's corporate reorganization and bankruptcy practice, said, "We have known Katie for many years and are very pleased she has chosen to join us. She is a terrific lawyer and there's no doubt that having her here will help us serve our clients' needs as corporate reorganizations grow more and more complex." Ken Lefkowitz, co-chair of the firm's corporate practice group, added, "We are very excited to have another experienced bankruptcy transactional lawyer who will augment our active mergers and acquisitions practice." Hughes Hubbard's corporate reorganization and bankruptcy lawyers have played a leading role in some of the most widely publicized insolvency cases in the past twenty years. The firm is currently representing James Giddens, the co-chair of the practice, as Trustee of Lehman Brothers, Inc., and is also playing major roles in numerous high-profile chapter 11 cases and out-of-court workouts. Hughes Hubbard & Reed LLP, an international law firm based in New York, is ranked #1 in New York and #2 nationally on The American Lawyer's A-List of the "top firms among the nation's legal elite." The American Lawyer also ranked the firm #4 in "Top Growth Firms" among the nation's 200 largest firms over the last 10 years. * Rochdale Analyst Forecasts 150 to 200 More U.S. Bank Failures --------------------------------------------------------------- Richard Bove of Rochdale Securities said that 150 to 200 additional banks in the United States will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25% of pretax income in 2010, Reuters News Service reported. Mr. Bove said this scenario would likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system. "The difficulty at the moment is finding enough healthy banks to buy the failing banks," Mr. Bove wrote. This year's closed banks have risen to 81. Regulators have seized the most U.S. banks this year since 1993. The FDIC was able to locate buyers for all deposits and certain assets of most of the closed banks. The bank closings, however, have cost FDIC's fund billions of dollars. FDIC's insurance fund had $13 billion at the end of March. Five of the closed banks this year -- Guaranty Bank, Colonial Bank, BankUnited FSB, Silverton Bank, Vineyard Bank cost the fund $12.58 billion. Last Friday, BBVA Compass, Birmingham, a U.S. affiliate of Banco Bilbao Vizcaya Argentaria SA, Spain's second biggest bank, assumed $11.5 billion of deposits of Guaranty Bank and purchase $12 billion of the failed bank's assets. BBVA said adding Guaranty's assets and deposits will create the 15th biggest U.S. commercial bank, with $49 billion in deposits and 767 branches in seven states. The FDIC's board of directors will meet in open session on Wednesday, August 26, to consider, among other things, a memorandum and resolution regarding "Final Statement of Policy of Qualifications for Failed Bank Acquisitions." According to the New York Times, the FDIC plans to ease rules to allow private- equity investors to acquire insolvent banks. NYT, which cited unidentified people, said the move would help reduce the number of failed banks the FDIC needs to support as their number increases. 2009 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks: Buyer's FDIC Cost Assumed to Insurance Deposits Fund Closed Bank Buyer (millions) (millions) ----------- ---- -------- ----- Guaranty Bank BBVA Compass, Birmingham $11,656.0 $3,000.0 ebank, Atlanta, GA Stearns Bank, N.A. $130.0 $163.0 First Coweta Bank United Bank, Zebulon $144.0 $48.0 CapitalSouth Bank IBERIABANK, Lafayette $542.4 $151.0 Colonial Bank BB&T, Winston-Salem $20,000.0 $2,800.0 Union Bank, N.A. MidFirst Bank $14.0 $61.0 Community Bank Nev FDIC-Created DINB $1,375.8 $781.5 Community Bank Ariz MidFirst Bank $143.8 $25.5 Dwelling House PNC Bank, N.A. $13.8 $6.8 First State Bank Stearns Bank, N.A. $379.0 $116.0 Community National Stearns Bank, N.A. $93.0 $24.0 Community First Home Federal Bank, Nampa $151.0 $45.0 Integrity Bank Stonegate Bank, Fla. $102.0 $46.0 Mutual Bank United Central, Tex. $1,600.0 $696.0 First BankAmericano Crown Bank, Brick, NJ $157.0 $15.0 First State, Altus Herring Bank, Amarillo, Tex. $98.2 $25.2 Peoples Community First Financial Bank, Ohio $598.2 $129.5 Waterford Village Evans Bank, N.A. $58.0 $5.6 SB - Gwinnett State Bank and Trust $292.0 } SB - North Fulton State Bank and Trust $191.0 } SB - Jones County State Bank and Trust $387.0 } $807.0 SB - Houston County State Bank and Trust $320.0 } SB - North Metro State Bank and Trust $212.0 } SB - Bibb County State Bank and Trust $1,000.0 } Temecula Valley First-Citizen Bank $996.0 $391.0 Vineyard Bank Calif. Bank, San Diego $1,456.0 $579.0 BankFIrst, Sioux Alerus Financial, N.A. $254.0 $91.0 First Piedmont First American Bank $109.0 $29.0 Bank of Wyoming Central Bank & Trust $59.0 $27.0 John Warner Bank State Bank of Lincoln $64.0 $10.0 1st State Winchest. First Nat'l Beardstown $34.0 $6.0 Rock River Bank Harvard State Bank $75.8 $27.6 Elizabeth State Galena State Bank $50.4 $11.2 1st Nat'l Danville First Financial $147.0 $24.0 Founders Bank PrivateBank and Trust $848.9 $188.5 Millennium State State Bank of Texas $115.0 $47.0 Mirae Bank Wilshire State Bank $362.0 $50.0 Metro Pacific Bank Sunwest Bank, Tustin $67.0 $29.0 Horizon Bank Stearns Bank, N.A. $69.4 $33.5 Neighborhood Comm CharterBank, West Point $191.3 $66.7 Community Bank -- None -- - - First National Bank Bank of Kansas $142.5 $32.2 Cooperative Bank First Bank, Troy, N.C. $717.0 $217.0 Southern Community United Community $307.0 $114.0 Bank of Lincolnwood Republic Bank, Chicago $202.0 $83.0 Citizens National Morton Community $200.0 $106.0 Strategic Capital Midland States Bank $471.0 $173.0 BankUnited FSB WL Ross-Led Investors $8,300.0 $4,900.0 Westsound Bank Kitsap Bank $295.1 $108.0 America West Cache Valley Bank $284.1 $119.4 Citizens Community N.J. Community Bank $43.7 $18.1 Silverton Bank -- No Buyer -- - $1,300.0 First Bank of Id US Bank, Minneapolis $261.2 $191.2 First Bank of BH -- No Buyer -- - $394.0 Heritage Bank Level One Bank $101.7 $71.3 American Southern Bank of North Georgia $55.6 $41.9 Great Basin Bank Nevada State Bank $221.4 $42.0 American Sterling Metcalf Bank, Lee Summit $171.9 $42.0 New Frontier Bank -- No Buyer -- - $670.0 Cape Fear Bank First Federal, Charleston $403.0 $131.0 Omni National -- No Buyer -- - $290.0 TeamBank, N.A. Great Southern Bank $474.0 $98.0 Colorado National Herring Bank, Amarillo, TX $82.7 $9.0 FirstCity Bank -- No Buyer -- - $100.0 Freedom Bank Nat'l Georgia Bank, Lavonia $161.0 $36.2 Security Savings Bank of Nevada, L.V. $175.2 $59.1 Heritage Community MB Financial Bank, N.A. $218.6 $41.6 Silver Falls Citizens Bank $116.3 $50.0 Pinnacle Bank Washington Trust Bank $64.0 $12.1 Corn Belt Bank Carlinville Nat'l Bank $142.4 $100.0 Riverside Bank TIB Bank $281.4 $201.5 Sherman County Heritage Bank $85.1 $28.0 County Bank Westamerica Bank $1,300.0 $135.0 Alliance Bank California Bank & Trust $951.0 $206.0 FirstBank Regions Bank $279.0 $111.0 Ocala National CenterState Bank $205.2 $99.6 Suburban Federal Bank of Essex $302.0 $126.0 MagnetBank -- No Buyer -- - $119.4 1st Centennial First California Bank $302.1 $227.0 Bank of Clark Umpqua Bank $523.6 $120-145 Nat'l Commerce Republic Bank of Chicago $402.1 $97.1 A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total holders Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ABSOLUTE SOFTWRE ABT CN 107 (7) 24 ACCO BRANDS CORP ABD US 1,100 (107) 135 AFC ENTERPRISES AFCE US 142 (26) 12 AMER AXLE & MFG AXL US 1,920 (736) (1,119) AMR CORP AMR US 24,138 (3,000) (3,129) ARBITRON INC ARB US 220 0 2 ARRAY BIOPHARMA ARRY US 95 (73) (5) ARVINMERITOR INC ARM US 2,627 (846) 3 AUTOZONE INC AZO US 5,296 (45) (527) BIOSPECIFICS TEC BSTC US 12 6 9 BLOUNT INTL BLT US 474 (36) 151 BOARDWALK REAL E BEI-U CN 2,377 (22) N.A. BOARDWALK REAL E BOWFF US 2,377 (22) N.A. BP PRUD BAY-RTU BPT US 9 8 0 BURCON NUTRASCIE BU CN 4 3 2 CABLEVISION SYS CVC US 9,307 (5,284) (198) CARDTRONICS INC CATM US 468 (10) (50) CENTENNIAL COMM CYCL US 1,455 (948) 180 CENVEO INC CVO US 1,459 (231) 186 CHENIERE ENERGY CQP US 1,920 (436) 27 CHOICE HOTELS CHH US 357 (141) (22) CINCINNATI BELL CBB US 2,009 (623) (19) CLOROX CO CLX US 4,576 (175) (757) DEXCOM DXCM US 65 1 37 DISH NETWORK-A DISH US 7,265 (1,519) (240) DOMINO'S PIZZA DPZ US 461 (1,372) 113 DUN & BRADSTREET DNB US 1,623 (719) (147) DYAX CORP DYAX US 68 (37) 32 EASTMAN KODAK EK US 7,105 (109) 1,100 EINSTEIN NOAH RE BAGL US 150 (4) (47) ELECTRO-OPTICAL MELA US 8 7 6 ENERGY COMPOSITE ENCC US 0 0 0 EPICEPT CORP EPCT SS 16 (3) 7 EXELIXIS INC EXEL US 333 (123) 29 EXTENDICARE REAL EXE-U CN 1,719 (47) 111 FORD MOTOR CO F US 204,327 (9,418) ####### FORD MOTOR CO F BB 204,327 (9,418) ####### FX ENERGY INC FXEN US 40 7 4 GENCORP INC GY US 1,015 1 (8) GLG PARTNERS INC GLG US 494 (271) 166 GLG PARTNERS-UTS GLG/U US 494 (271) 166 GOLD RESOURCE CO GORO US 9 9 7 HAYDEN HALL INC HYDN US 1 (5) (6) HEALTHSOUTH CORP HLS US 1,888 (662) (77) HERMAN MILLER MLHR US 767 8 167 HUMAN GENOME SCI HGSI US 670 (55) 117 IDENIX PHARM IDIX US 82 (4) 34 IMAX CORP IMX CN 270 (18) 55 IMAX CORP IMAX US 270 (18) 55 IMMUNOMEDICS INC IMMU US 59 0 7 IMS HEALTH INC RX US 2,030 (22) 318 INCYTE CORP INCY US 159 (291) 101 INSULET CORP PODD US 99 (3) 63 INTERMUNE INC ITMN US 165 (80) 98 IPCS INC IPCS US 553 (34) 68 ISTA PHARMACEUTI ISTA US 72 (78) 24 JAZZ PHARMACEUTI JAZZ US 108 (88) (17) JUST ENERGY INCO JE-U CN 457 (652) (369) KNOLOGY INC KNOL US 639 (44) 37 LIN TV CORP-CL A TVL US 781 (187) 14 LINEAR TECH CORP LLTC US 1,421 (266) 963 LODGENET INTERAC LNET US 594 (64) 46 LOGMEIN INC LOGM US 47 7 1 MANNKIND CORP MNKD US 267 (19) 0 MAP PHARMACEUTIC MAPP US 65 1 24 MAXLIFE FUND COR MXFD US 0 0 0 MEAD JOHNSON-A MJN US 1,926 (808) 466 MEDIACOM COMM-A MCCC US 3,707 (426) (265) MODAVOX INC MDVX US 5 3 (1) MOODY'S CORP MCO US 1,873 (749) (404) NATIONAL CINEMED NCMI US 603 (499) 91 NAVISTAR INTL NAV US 9,656 (1,447) 1,784 NPS PHARM INC NPSP US 144 (219) 80 OCH-ZIFF CAPIT-A OZM US 1,854 (157) N.A. ONCOGENEX PHARMA OGXI US 7 3 4 OSIRIS THERAPEUT OSIR US 129 2 64 OTELCO INC-IDS OTT-U CN 349 9 24 OTELCO INC-IDS OTT US 349 9 24 OVERSTOCK.COM OSTK US 129 (3) 33 PALM INC PALM US 643 (108) 11 PDL BIOPHARMA IN PDLI US 217 (306) 140 PERMIAN BASIN PBT US 10 0 9 PETROALGAE INC PALG US 7 (32) (16) POTLATCH CORP PCH US 916 0 N.A. QWEST COMMUNICAT Q US 20,226 (1,051) 260 REGAL ENTERTAI-A RGC US 2,647 (228) (40) RENAISSANCE LEA RLRN US 58 0 (6) REVLON INC-A REV US 797 (1,074) 87 SALLY BEAUTY HOL SBH US 1,464 (645) 420 SANDRIDGE ENERGY SD US 2,364 (91) 114 SEMGROUP ENERGY SGLP US 354 (128) 31 SIGA TECH INC SIGA US 8 (13) (4) SONIC CORP SONC US 828 (22) 75 STANDARD PARKING STAN US 230 4 (13) STEREOTAXIS INC STXS US 43 (10) (3) SUCCESSFACTORS I SFSF US 165 (5) 1 SUN COMMUNITIES SUI US 1,192 (81) N.A. SYNERGY PHARMACE SGYP US 0 (1) (1) TALBOTS INC TLB US 999 (184) (28) TAUBMAN CENTERS TCO US 2,858 (184) N.A. TENNECO INC TEN US 2,767 (289) 240 THERAVANCE THRX US 206 (263) 144 UAL CORP UAUA US 18,805 (159) (2,345) UNITED RENTALS URI US 3,918 (2,628) 316 US AIRWAYS GROUP LCC US 7,857 (46) (548) VECTOR GROUP LTD VGR US 757 (336) 158 VENOCO INC VQ US 725 2 (3) VERIFONE HOLDING PAY IT 843 (165) 299 VERIFONE HOLDING PAY US 843 (14) 299 VERIFONE HOLDING VF2 GR 843 (14) 299 VIRGIN MOBILE-A VM US 320 (256) (126) WARNER MUSIC GRO WMG US 3,988 (142) (680) WEIGHT WATCHERS WTW US 1,085 (791) (309) WR GRACE & CO GRA US 3,815 (351) 977 ZYMOGENETICS INC ZGEN US 271 (14) 85 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Danilo Munnoz, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **